Mercer International Inc. acquiring former Katerra plant in Spokane Valley for $50 million

A global pulp and forest products company is expanding into the cross-laminated timber market with acquisition of the former Katerra plant in Spokane Valley.

Vancouver, Canada-based Mercer International Inc. received approval last week from a U.S. bankruptcy court to purchase the 270,000-square-foot manufacturing facility for $50 million.

The facility, located on 54 acres at 19202 E. Garland Ave., is equipped with state-of-the-art automation technologies and is capable of annually producing more than 140,000 cubic meters of cross-laminated timber.

It’s the largest cross-laminated timber plant in the nation, according to Mercer International.

“Mercer is very pleased with the acquisition,” Mercer International CEO David Gandossi said.

“It’s a well-invested facility and I’m sure it will be successful in time. (Cross-laminated timber) is an exciting product that’s really starting to take off.”

The acquisition aligns with Mercer’s goal to provide carbon-friendly alternatives and its strategy to enter the growing cross-laminated timber market, Gandossi said.

Cross-laminated timber is made by compressing and gluing together lumber boards to form structural panels and beams.

Europe is the leading market for cross-laminated timber.

But its popularity is growing in the U.S. because of the material’s low-carbon footprint, fire resistance and speed of installation, among other things.

“We have a chance to be a big fish in a relatively small pond that’s growing very rapidly,” Gandossi said.

Mercer International, a publicly traded company, has mill and timber operations in Germany and Canada with annual production capacity of more than 2 million tons of pulp and 550 million board feet of lumber.

The company also produces and sells renewable bioelectricity, according to its website.

The transaction was part of a court-supervised sale of Katerra’s assets after the California-based construction startup filed for Chapter 11 bankruptcy protection in early June.

Katerra sought to transform the construction industry through technology, prefabricated parts and manufacturing cross-laminated timber.

The company, which raised nearly $2 billion from investors – including Softbank Group Corp. – operated in the U.S., India and Saudi Arabia before shuttering in June.

It opened the cross-laminated timber plant in Spokane Valley in 2019.

Last year, Katerra partnered with Avista Development, McKinstry and Eastern Washington University to complete the $60 million, 150,000-square-foot Catalyst Building in Spokane’s University District.

It was the first office building in the state to be constructed with cross-laminated timber.

Mercer International will not replicate Katerra’s business model of operating as a design, build and project management firm.

Instead, it will focus on supplying cross-laminated timber to architects and general contractors, Gandossi said.

The company is hiring in preparation for opening the Spokane Valley plant.

So far, it has hired nine employees who previously worked for Katerra, Gandossi said.

“To run that plant is about 40 jobs on one shift. As we build the business, that could go up to two shifts,” Gandossi said, adding there’s a possibility for the plant to generate additional indirect jobs.

Mercer International aims to begin manufacturing cross-laminated timber in the facility by November, Gandossi said.