Devin Stockfish: Yes. I mean, it’s product dependent but it can range anywhere from 3 weeks to 5 weeks is pretty much in that normal range and that’s kind of where we’re sitting right now.
Michael Roxland: Perfect. And then just one quick question on Timberland, especially on pulpwood. I want to get your thoughts around mill closures, line closures that happened in terms of number of containerboard mills have closed, the number of pulp lines have been taken offline permanently. You have Enviva going through a restructuring. So would love to get your thoughts on pulpwood demand, obviously plus valuable inflection but nevertheless, it helps with shorter retention, helps with near-term cash flow. So how do you think about rotations, harvest planning and the like, given the changing end market dynamics?
Devin Stockfish: Yes, that’s a great question. We’ve seen over the last several years, generally speaking, the pulpwood market has been somewhat in decline. We’ve seen a lot of mill closures over the years, as you say. Just even recently, we’ve had a handful of either full mill closures or line closures and that’s created some challenge, broadly speaking, in the pulpwood market. I would say for us, because of our scale, we generally have pretty strong relationships with the big consumers of pulpwood. That’s true across the pulp and paper manufacturers. That’s true across the pellet manufacturers. And so as a general matter, we’re typically able to move our volume. But obviously, the pricing dynamic is impacted with less demand overall, so it’s something that we’re certainly watching.
As we think about silviculture, one of the fundamental tenets of how we think about that over the long term is to make sure that we have optionality out into the future. And so as we think about how many trees per acre, our thinning regimes, all of those things, they contemplate a future where we either need more or less grade fiber, et cetera. So we try to preserve as much flexibility out into the future as we can. All of that being said, I would note on the pulpwood market, we’re continuing to look — we, Weyerhaeuser, are continuing to look for opportunities to move that volume. We’re having conversations with parties in Asia about potential, either pellet or pulpwood type opportunities, for export. I think there may, in the not-too-distant future, be opportunities for biofuels, sustainable aviation fuels that could tension up some of those markets as well.
And so our business development team is very focused on that. And we’ll make sure that we, Weyerhaeuser, are able to move our pulpwood volume over time.
Michael Roxland: And good luck in the year.
Operator: Our final question is from Ketan Mamtora with BMO Capital Markets.
Ketan Mamtora: Devin or Davie, can you talk a little bit about maybe just a couple of key projects that you have in Wood Products from a CapEx standpoint?
Devin Stockfish: Yes. I mean, so I’ll start with Holden. That’s our latest mill rebuild brownfield project. That’s coming along nicely. We started up the planer mill in Q4. We’re ramping up production. We feel very good about that project. The beauty about Holden is it’s going to be a phenomenal world-class mill that’s completely surrounded by our fee timberlands. So a lot of synergies there and we’re excited to see that fully ramp up this year. Beyond that, our program is really just, it’s projects that we’ve already done in other places. So it’s nothing super sexy. It’s adding CDKs, it’s adding new merchandisers, trim store stackers, gang saws. Really, the way that program is developed is every mill has a 5-year road map on how to get from where we are today to world-class.
And each individual mill may have different things that are bottlenecks that they need to fix and solve to get to that point. So it’s nothing really remarkable. It’s just continuing to do what we have been doing, executing well and making sure we do those projects on time, on budget and that’s really the essence of our capital plan and has been, for the most part, for a number of years.
Ketan Mamtora: Understood. That’s helpful. And then just 1 more question around capital allocation, Devin. As you sort of look to 2024 and beyond, I mean, it’s been for a couple of years that you are on this sort of the new approach to capital allocation. Any sort of update around how you guys are thinking about supplemental dividend versus share repurchases? And sort of as you look at the different options, sort of how do you think about one over the other?
David Wold: Sure. You bet, Ketan. I think we really have looked at that consistently over the last few years and I really don’t see that changing substantially as we move forward. I would just say we’re in a very fortunate position. We have a lot of levers, so that includes M&A, investing in the business, paying down debt, base, variable dividend payments, among others. We’re constantly evaluating those views on capital allocation but those factors are dynamic. So it’s something we always need to be watching. To your point, our capital allocation framework starts with that commitment to return 75% to 80% of our adjusted FAD back to shareholders via the base, the supplemental. And we do have the flexibility with our framework to use share repurchase as we’ve done over the last few years.
So that portion is really earmarked for returning cash back to shareholders. And with the remaining adjusted FAD, we can allocate that across other opportunities. So as we move forward, I would expect we’re likely going to be allocating most of that amount that we have on our balance sheet here in the near term to timberland acquisitions as part of our previously announced plan to purchase $1 billion of timberlands over the next few years. But that said, we do have the flexibility within our capital allocation approach to deploy those cash across the options when we see an opportunity to create value for shareholders.
Operator: There are no further questions at this time. I would like to turn the floor back over to Devin Stockfish for closing comments.
Devin Stockfish: Terrific. Well, thanks everyone for joining us this morning and thank you for your continued interest in Weyerhaeuser. Have a great day.
Operator: This concludes today’s conference. You may disconnect your lines at this time and we thank you for your participation.
