Touring Boise operations

By Bill Rautenstrauch, The Observer May 25, 2011 07:40 pm
Community leaders receive first-hand look at plants, including re-opened La Grande sawmill Guarded optimism about market conditions tempered by concerns over a shortage of available timber dominated talk Friday as Boise Cascade’s Inland Region hosted about a dozen community leaders in a second annual Community Awareness Day.

The event, which included tours of Boise Cascade’s Union County plants, began with an informational session at the newly re-opened La Grande sawmill. During the talk, Region Manager Tom Insko said he is proud that Boise Cascade remains Union County’s largest private sector employer.

Insko said the region, including mills in Kettle Falls, Wash., Pilot Rock and in Union County, employ 870 workers. The Union County mills provide employment for about 580.

“What I like is that when I run into one of our employees at Walmart or downtown, I know he or she is getting good pay, health care and vacation,” Insko said. “We do that by design because we want the best employees possible.”

Insko said keeping people at work has been a challenge through the economic downturn. He talked about the recession that began in 2007 and continues to plague the wood products industry today.

He said that between 1999-2009, Inland Region annual sales averaged $242 million, and once hit a high of $330 million. In 2009, they dipped to $166 million.

While the worst may be over, Insko said the construction industry remains sluggish, with housing starts far below levels needed to keep sawmills healthy.

But that, he said, is likely to change.

“Between 2013 and 2015, there’s a pretty good chance housing starts will be very robust,” he said.

On the downside, Insko said local mills face log procurement problems that will only get worse unless the federal government changes its policies on timber sales. When markets do come back, Boise will need logs to keep up with demands.

“We’ve got some real challenges ahead of us, and I think it’s important for the community to know that,” he said.

Forest Capital Partners, the timberlands manager that bought Boise Cascade’s timber holdings in 2004, currently supplies about 50 percent of the Inland Region’s local needs.

At the time of the buyout, Forest Capital agreed to a 10-year timber supply contract with Boise. When that expires, the playing field will change considerably, Insko said.

“Forest Capital’s been able to supply us with a lot more than they’re going to. We’re going to have to find other sources,” he said.

Sales on the Wallowa-Whitman, Umatilla and Malheur national forests — the so called “Iron Triangle” of Eastern Oregon — are few and far between. Insko said he hopes to see that change.

“With four-dollar-a-gallon diesel, it’s hard to provide family wage jobs,” he said. “We’re hoping national forests in the Blue Mountains will step up.”

Boise is getting a big share of its logs these days from federal forests on the west side of Oregon and in Idaho. It’s a too-costly way to do business, Insko said.

The day’s tours began with a walk-through of the La Grande sawmill, which re-opened on a limited basis in April following a closure of nearly two years.

The sawmill shut down in the summer of 2009, a victim of poor market conditions and skyrocketing operating costs. Insko said re-opening was a gamble the Inland Region felt it had to take.

“There’s always a big risk with a start-up but I’m optimistic about it,” he said.

 The La Grande mill, christened Mt. Emily Lumber, is named for the mill that operated on the same site between the 1920s and 1950s. The name pays homage both to local history and the future.

“We wanted something in our brand that connects with the past yet shows what we’re trying to do moving forward,” Insko said.

Insko said the plant is working with small-diameter logs. Much of the end product is sold at Home Depot stores across the nation.

With housing starts sluggish, a good deal of Boise Cascade lumber is being purchased by the “shoulder trade,” customers needing wood for do-it-yourself home improvement projects or arts and crafts.

Insko said the La Grande mill employs about 30 people, a far cry from the number that worked there before the recession.

“If we were generating full capacity, it would be 130-140. We don’t see that happening in the near future,” Insko said.

He said a few people who worked at the

La Grande mill before the closure were hired back in April, but mostly it’s a new staff.

“We’ve got a lot of green hands, but they’re good people,” he said.

One man who did work at the La Grande mill and was hired back is Dennis Higgins. As people on the tour watched Friday, he sat at a station tracking logs as they went through the milling process.

“It’s good to hear those sounds again, and smell the wood,” Higgins said.

Insko said producing boards is only one part of what Mt. Emily Lumber does. The mill also supplies residual material for particleboard manufacturing at the Island City plant.

“Our own mills supply about 50 percent of the furnish we need for the particleboard,” Insko said.

From La Grande, the tour moved on to the particleboard plant near Island City. Though the plant survives, Insko said, it has a long way to go before it’s fully recovered from the recession.

Currently, the operation employs about 95 people, with only one production line running.

“It’s a brutal business,” Insko said. “The particleboard operation was the hardest hit in the downturn. We’re currently running at  about 30 percent of capacity.”

But the news isn’t all bad. Insko said that a newly-developed slatwall product called Anchor is helping sales.

“It’s stronger than MDF,” he said. “Some of our competitors would really like to know how we make it,” he said.

The Elgin plywood plant and stud mill, second to the last stop on the tour, remain the largest and most robust of Boise Cascade’s Union County operations. The mills, situated adjacent to each other, employ about 325 workers.

Home Depot is a principal buyer of plywood shipped from Elgin. Elgin also supplies the studs used to make Tuff Shed outbuildings sold by Home Depot.

Elgin Production Manager Greg Howard said the plywood operation is running 24 hours a day, seven days a week. The stud mill currently runs a single shift.

“A lot of material is coming into and out of the facility every day,” Howard said.

Before the day came to an end, participants were bused to the Loon timber sale about 10 miles from Elgin on the Umatilla National Forest.

Insko said the sale was the only one in recent times that hadn’t been appealed by an environmental group. Logs from the sale are being shipped to the Elgin facility.

“It’s an important sale for us,” he said.