In a county known for the Crater of Diamonds, Caddo River Forest Products may have found a diamond in the rough.
On Wednesday, state, federal and local officials announced that Caddo River would make a $50 million investment in a closed sawmill in Glenwood that would add 136 new jobs, up to 300 indirect jobs and an annual payroll of approximately $4 million to southwest Arkansas.
“Caddo River Forest Products is thankful for all of the support received from CAT Financial, the Arkansas Department of Environmental Quality, the City of Glenwood, Pike County, the State of Arkansas and the U.S. Economic Development Administration program,” said David Henderson, a member of the Caddo River partnership. “We are pleased to bring back important jobs to the area.”
Henderson said that strengthening numbers in housing starts led to the company investment as he expected demand to pick up in the next few months and years.
“We’ll produce two-inch dimensional lumber, some fiberboard dimension wood and maybe some other specialty products,” Henderson told Talk Business & Politics at an afternoon press conference in the Little Rock building that houses the Arkansas Economic Development Commission.
The abandoned sawmill in Glenwood was originally built by Georgia Pacific and later owned by Curt Bean, a lumber company, that closed the plant in 2008 after filing bankruptcy. The site had become an environmental hazard, but ADEQ was able to qualify the project for its brownfields program, which allowed for property rehabilitation.
“From the beginning a ‘go-no go’ issue was solving the environmental question,” Henderson said. “But we worked with ADEQ through that process.”
Caddo River has been operating in south Arkansas for years as a privately-held timber investor and owner. The company bought the Glenwood sawmill earlier this year for $4 million at a foreclosure auction. Henderson said he and his partners are very familiar with Arkansas’ “wood basket” and potential markets. “We watch housing starts and projections very closely and it’s trending in the right direction,” he said.
U.S. housing starts rose more than expected in April but slipped in May. However, groundbreaking has increased to a seasonally adjusted annual pace of 1.16 million units, the Commerce Department said last week. Single family housing starts, which have been consistently steady, rose 2.6% in May to their highest level since December 2007. Multi-family housing starts have been more volatile.
Officials from Pike County were on hand for the announcement, including the mayors of Glenwood and nearby Murfreesboro as well as the Pike County judge.
“The best thing for the citizens of Glenwood and surrounding areas is the opportunities for jobs, the dignity and joy of working to support their families,” said Glenwood Mayor Ron Martin.
With about 11,000 residents, the jobless rate in Pike County currently stands at 3.9%, just one-tenth of a percent higher than the state rate of 3.8%. Martin said he believes the low number doesn’t reflect full-time employment.
“I think you’ll find some of them are underemployed. They’d like to find a better job,” Martin said.
Pike County Judge Dewight Mack added, “We want it to be zero unemployment.”
Mayor Rodney Fagan of Murfreesboro, home to the Arkansas Crater of Diamonds State Park, said he expected his community to benefit from the announcement despite being 25 miles away.
In addition to the 136 sawmill jobs and an estimated 200-300 timber-related jobs, state and federal officials provided a number of incentives and two major grants.
The U.S. Economic Development Administration (EDA) provided a grant for $817,726 to the city of Glenwood for water and roadway infrastructure improvements to the facility. The state of Arkansas applied a $339,000 Community Development Block Grant to be used on facility infrastructure.
The state also provided a Create Rebate incentive for a cash rebate equal to 4.5% of new payroll for the next four years and it used its Tax Back program, which provides a sales tax refund on building materials, taxable machinery and equipment associated with the project.
“The timber industry is vital to Arkansas’ economic well-being,” said Mike Preston AEDC executive director. “The jobs created by Caddo River Forest Products will have a lasting impact on many families in Greenwood and the surrounding area.”
The timber-related investment is another positive sign for south Arkansas. In recent months, the state has seen a $1.3 billion paper processing factory announce it will locate near Arkadelphia and two wood pellet plants are on track to come online in the Pine Bluff and Monticello communities.