County, firm, agree on sale

By Katy Nesbitt/The Observer July 08, 2013 10:31 am

 Integrated Biomass buys former D.R. Johnson mill site from Wallowa County 

WALLOWA — Integrated Biomass Resources has purchased the Wallowa County-owned mill site where it has run its operation since early 2012. By fall, the mill will be upgraded to handle more logs, produce more wood products and provide more jobs.

The financing package Integrated Biomass secured last week allows the now 4-year-old company to buy the former D.R. Johnson mill site in Wallowa from the county and build an automated system that will streamline production.

“We are building something and creating jobs and making products,” Integrated Biomass Resources owner David Schmidt said. “We added several jobs in the last couple weeks and will likely add another half dozen when the project is completed.”

Schmidt said building the system will put all the milling equipment together into one operation. Construction should take approximately four months.

“Right now we handle logs four or five times. The new system will be all inline and integrated so we don’t waste material,” Schmidt said. “We bring in mixed, biomass logs and sort them to the woods’ best use. We have five different product lines and the new system will make us much more streamlined.”

The mill was established in the late summer of 2009 and has grown incrementally ever since. Buying sawmill equipment from around the region, Integrated started out making firewood and selling it to wholesalers. Later, it bought Wallowa’s post and pole plant.

The company also supplies wood chips for Enterprise High School’s wood-fired boiler and is looking at ways to expand into the pulp market.

Last October, the mill installed a wood-fired heat and power plant. The power generated offsets the mill’s power needs and heats its kiln, which treats its certified pest-free firewood.

Schmidt said he historically has had a contractor come in to grind up the waste from the other products for fuel to feed the school and boiler. The new automated system will do this for him and alleviate the need for a third-party.

“The system will buck up saw logs for Boise Cascade, other logs will go for firewood, poles and chips will go to the pulp market and the bark and waste will feed the boiler,” Schmidt said.

The construction will be completed by Ladco Electric of Wallowa, Wellens Farwell of Enterprise, and the sawmill equipment will be installed by West Coast Industrial from Lebanon, according to Schmidt.

In January 2012, Wallowa County created the Wallowa County Land Acquisition, LLC to purchase the former Wallowa Forest Products mill on Lower Diamond Road. The property was acquired for $600,000 and was leased to Integrated Biomass with an option to buy.

When Wallowa Forest Products stopped operating in the mid-2000s it was the last of the Wallowa County sawmills to disappear. The county lost 75 jobs and its schools’ enrollments have declined.

To fund the purchase, Wallowa County Board of Commissioners Chairman Mike Hayward said the LLC borrowed $500,000 from the county public works’ asphalt fund, with the additional $100,000 coming from Oregon Business Development.

Schmidt said the county purchase was with the explicit goal of facilitating economic development and job creation in the county. As a result, Integrated Biomass Resources was able to continue to invest in growing its manufacturing business and local employment.

“The decision that Mike Hayward, Susan Roberts and Paul Castilleja made in the fall of 2011 to purchase the property made what we’re doing now possible and we’re incredibly grateful for their support,” Schmidt said. “The commissioners’ action allowed us to expand our manufacturing and keep adding jobs and building a local market for biomass.”

Integrated’s ability to buy the land from the county happened sooner than anyone thought it would. 

“When the county bought the property and leased it to Integrated Biomass, it was with an option to purchase it; it was not our intent to own it forever,” Hayward said. “Integrated followed our intent from the get-go and it worked like it was intended.”

The county commissioners are often called on to help with job creation and Hayward said he thinks in some small way they have done that.

“It’s always a question if government should be involved. Some say, ‘You need to do more to create jobs.’ If there’s an opportunity, we need to at least look at it,” Hayward said.

Contact Katy Nesbitt at 541-786-4235 or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Follow Katy on Twitter @lgoNesbitt.