The burgeoning demand for electric cars, solar energy expansion, Washington's rural-broadband initiative, and the fortification of the grid against severe storms has set off a boom in the utility-pole business. Public and private infrastructure spending has driven a hunt for the tallest, straightest, and knot-free conifers, essential for utility poles. Facilities like Koppers Holdings' pole plant in southeastern Georgia are playing a crucial role, peeling, drying, and pressure-treating these conifers.
Jim Healey, Koppers' Vice President of utility and industrial products, notes the increased need for larger poles in the era of fiber optics and electric cars. This demand has led to higher prices for standout trees, benefiting landowners in the South who grow much of the region's pine.
Shareholders of major pole businesses, including Pittsburgh's Koppers and Montreal's Stella-Jones, are reaping the rewards with impressive stock gains. Koppers Holdings and Stella-Jones shares are up 38% and 91%, respectively, over the past year. Stella-Jones' Chief Executive, Éric Vachon, told WSJ that the current demand for utility poles in North America is surpassing capacity.
To meet this demand, companies like Stella-Jones are expanding, acquiring pole facilities in multiple states and investing in automated drilling equipment. Koppers, on the other hand, is enhancing drying capacity in various plants across the country, anticipating a robust market for the next three to five years.
The push for high-speed internet in rural areas, coupled with the allocation of funds from the federal government and the infrastructure bill, is expected to drive further demand for utility poles. Additionally, the need to replace aging poles, some decades older than their intended lifespan, contributes to the industry's growth.
