Taking Stock: Heck Of A Commercial Dispute

The temporary closure of Structurlam’s Conway, Ark. cross-laminated timber (CLT) and glulam plant and the apparent severing of the plant’s relationship as a major supplier for Walmart’s new low carbon footprint and energy efficient corporate campus in nearby Bentonville marks yet another growing pain for an industry that’s just getting started realizing its amazing potential.

In 2019 Structurlam announced that the new campus project was to be fed by Structurlam’s new CLT facility that included a $90 million investment to upgrade a former steel mill and convert it to a CLT plant. Structurlam would become the “exclusive supplier of mass timber products” to the new Walmart home office campus, covering 350 acres, two million square feet of floor space and multiple office buildings.

The project moved along, and many were surprised in January this year when Structurlam officials announced the plant would be closing due to a customer contract cancellation, and we can only assume it means Walmart, though Structurlam refers now only to the “customer,” and says there are no plans to enter into a new commercial agreement. Walmart has announced it is still committed to its new HQ project and would be looking at other suppliers.

As to what happened, Structurlam CEO Matthew Karmel refers to it as a “commercial dispute, but we cannot discuss the specifics.” More specifically, according to sources in the CLT industry, the plant may have “overcommitted” to Walmart while dealing with startup issues, and there may have been dispute over product quality or composition. Then again, Structurlam started up and began delivering product in the teeth of the pandemic, experiencing supply chain issues and lumber price increases that weren’t planned for.

Following the 2021 bankruptcy of Katerra and its CLT plant in Spokane, Wash.—which set out to revolutionize the construction industry using pre-fab building and mass timber construction principles but couldn’t get out of its own way—the mass timber industry had re-gained the momentum, and is definitely expanding as designers, engineers and architects learn more about it. A couple of recent developments:

• Officials with Freres Lumber in Lyons, Ore. report their mass plywood plant is booked out several months of production and is supplying a large 18- story mass timber office building project in California, working with a major commercial builder that recently started a new mass timber building division.
• CLT producer Smartlam in Dothan, Ala. recently announced an expansion to add a new glulam beam line.

Back to Structurlam, CEO Karmel says the state-of-the-art Conway plant has met the vigorous startup challenges “with flying colors—its cross-laminated timber and glulam production capabilities already exceed its plan objectives and its processes have been validated repeatedly by the APA to exceed U.S. regulatory standards.” And, Karmel adds, Structurlam is in a strong position to resume Conway operations as the rapid growth of mass timber across North America continues to drive demand for manufacturing capacity.

That is, with Walmart out of the way, the Conway facility now has the ability to support new customers with more than 1 million cubic feet annually of mass timber products.

Article by Dan Shell, Senior Editor, Panel World