Initial economic impact of new lumber mill estimated at $23M

To say that Demopolis leaders are excited about Two Rivers Lumber Company opening a sawmill at the city’s port property could be an understatement.

“I’m kind of like a giddy schoolgirl,” said Woody Collins, chairman of the Demopolis Industrial Development Board.

Announcement of the new industry came last week. Mayor Mike Grayson said it is the biggest addition to the county since Gulf States Paper, now WestRock, opened in 1957. The project is the brainchild of Demopolis resident Roy Geiger, owner of Sumter Timber, and Jay McElroy of McElroy Trucking out of Cuba in Sumter County.

In a press conference Wednesday morning, Grayson and Collins gave the background to how the new industry came to Marengo County and the benefits to the west Alabama area.

The state-of-the-art mill will take the large Southern Yellow Pine trees that are too big for paper companies to use and convert them to produce all sizes of dimensional lumber to be marketed throughout the United States.

The initial hiring of up to 60 employees is expected to have a $23 million impact for the city, said Grayson. The state commerce department estimated another $32 million per year in income for timber owners.

When the mill reaches its full capacity of some 100 workers over two shifts, Grayson continued, it will be one of the top five employers in west Alabama. Jobs are expected to pay an average of $22 per hour. Training for mill employees will be provided by the state as well. Grayson said because this mill will be brand new, it will require a lot of computer skills.

He is hoping the industry will bring in a new influx of families, just as Gulf States Paper did when it opened.

In addition, added Collins, there is ripe opportunity for spin-off industries. The mill will produce 250,000 tons of chips each year. While the company already has an outlet for the chips, “several options are available” for new businesses to open to use the chips.

The road to the new mill also is used by WestRock at its chip facility, which has some 165 trucks traveling on it each day. Another 140 trucks are expected to use the road once the lumber mill is opened.

Grayson and Collins were in Montgomery Tuesday, Oct. 11, to talk to the Alabama Department of Transportation Road and Bridge Commission about help to widen the two-lane road. The state is granting the entire cost of the road, estimated at $400,000, and the city will not have to match it.

The only costs Demopolis must shoulder are the engineering and other preparation costs, which the City Council has approved.

While initial transportation will be done by truck, the new company is expected to develop the existing railroad tracks for future use. Both men said they hope Two Rivers Lumber will be the impetus for other industries to locate on the port site, which would generate interest in developing access to the Tombigbee River for transportation.

Collins said many industries are leaving the country, and few are being built. “We’re building one,” he said proudly. “You don’t get one of these very often.”

“Everything has fallen into place just wonderfully,” said Collins.

Construction is expected to start in January, he said. While a 100,000 –square-foot building is already on the site owned by the city, it needs to be strengthened to handle the weight of the machinery it will house. Collins said a lot of construction will be done off-site, but Grayson said more than 100 construction workers will be in the area for close to a year, boosting the local economy even more.

The first board foot of lumber is expected to be produced by the end of September, Collins said.

Both the state and the county are providing tax abatements and economic incentives to the new industry. The city is giving Two Rivers Lumber a break on the monthly lease payments. For the first five years the payments will be $1,000 per month. The cost jumps to $10,000 per month after that.

Two Rivers Lumber is leasing the property for 40 years with the option of buying the property after 20 years, said Grayson.

Since both McElroy and Geiger have businesses in the area, the new mill will be owned by local residents. Profits from the company will stay in west Alabama, said Grayson.

“We’re keeping the love at home.”