State to assist LP expansion in Sagola
IRON MOUNTAIN — A $194 million expansion at the LP Building Solutions mill in Sagola Township will bring 50 new jobs to the facility — along with the potential for more — aided by a state grant and tax incentives, Michigan Gov. Gretchen Whitmer said Wednesday.
Whitmer joined state economic development officials to promote the project as one of the largest ever supported in the Upper Peninsula by the Michigan Strategic Fund. It is expected to create at least 50 jobs and retain the 151 jobs currently at the site, backed by a $325,000 Michigan Business Development Program performance-based grant.
Michigan was chosen for the project over competing sites in the U.S. and Canada, officials said.
LP’s investment “underscores the strength of our talented manufacturing workforce and the attractiveness of our business climate,” Whitmer said in a press release. “Together, we will continue growing Michigan’s economy by empowering our hardworking people and innovative businesses.”
LP Building Solutions, headquartered in Nashville, Tenn., is an international leader in engineered wood building products for new construction, repair and remodeling, and outdoor structures. The company has operated in Sagola Township since 1988.
To meet growing customer demand for home siding, the company plans to convert its Sagola operations from the manufacture of oriented strand board to LP SmartSide trim and siding. The large-scale conversion has the potential for future expansion of a second processing line, which would create additional employment.
SmartSide lap and panel siding utilizes engineered wood strand technology that is advertised as an attractive, efficient and durable construction option. The expansion will include 134,000 square feet of new construction as well as new machinery and equipment.
“We are excited to see this significant investment in the LP Sagola facility,” said Dickinson Area Economic Development Alliance Executive Director Lois Ellis. “The project will align the plant to produce a high-value product and provide 50 additional family-sustaining jobs with excellent wages and benefits for area residents.”
“This project is an exciting win for the Upper Peninsula and further demonstrates Team Michigan’s commitment to supporting economic opportunities throughout all regions of the state,” said Quentin Messer, Jr., CEO of the Michigan Economic Development Corp. and president and chair of the Michigan Strategic Fund. “We appreciate LP Building Solutions’ vote of confidence in Michigan and our talented workforce. We are grateful to the governor and legislators for the continued support of the Michigan Business Development Program.”
Messer described the project as “a tremendous win for the Upper Peninsula.” While some other states offer more competitive incentives, the company was comfortable with the MSF package, which will help offset inflationary project costs, he said.
“This is about people,” Messer said, adding the company’s investment will have ripple effects across Dickinson and Iron counties. For families, the message is “I can come back (to the region) and have an opportunity at companies like this,” he said.
Customer demand for LP SmartSide trim and siding is at an all-time high, said Jason Ringbloom, the company’s executive vice president, general manager of siding. “To ensure our customers have the product they need to build beautiful, durable homes and structures, capacity expansion projects like our conversion of LP Sagola to the manufacture of LP SmartSide are incredibly important to LP. In addition to supplying the increased demand for SmartSide, converting LP Sagola to a siding facility positions the mill for years of growth and improved stability, which will benefit our local employees, their families, and the broader community. We are thrilled to welcome LP Sagola to LP’s SmartSide family of mills,” he said.
In addition to the MSF grant, Sagola Township anticipates approval of a property tax abatement in support of the project, officials said. MEDC also authorized a state education tax abatement to be used in conjunction with the locally approved abatement.
With 4,800 employees worldwide, LP operates 22 plants across the U.S., Canada, Chile, and Brazil. The company had announced in May that it expected siding production at Sagola to begin in the first quarter of 2023.