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The Boise Cascade plywood plant in Elgin, which opened in 1964, may close Jan. 1, 2021, at least temporarily, over a dispute with the Oregon Department of Environmental Quality.

BOISE — Boise Cascade announced in an Oct. 30 press release the company recorded $103.2 million in net income during the third quarter as demand for wood products outpaced supply and production nationwide, driving prices to record heights.

The company also reported it ended the third quarter with a total of $849.3 million in available liquidity, $503.9 million of which was cash or cash-equivalent.

“We look to the future with optimism, as our balance sheet provides us the flexibility to pursue organic and acquisition growth opportunities in support of our customers and suppliers,” Nate Jorgensen, CEO of Boise Cascade, said in the release.

Meanwhile, uncertainty continues to loom over Boise Cascade’s plywood plant in Elgin and its more than 200 employees. The company notified the plant’s workers two weeks earlier it reduced the purchases of logs for the facility and could cut production or temporarily close the plant over the winter.

The company blamed the potential closure on a permitting dispute with the Oregon Department of Environmental Quality regarding the presence of toxins in the plant’s wastewater. Boise Cascade filed a lawsuit over that dispute in late August, which is ongoing.

Boise Cascade previously attributed its reduction in the purchase of logs in part to this year’s severe wildfire season. The company, however, has since clarified the reduction results from the dispute with the DEQ.

“As the Elgin Mill relies on the process water system for operation and we have not yet reached a resolution with the DEQ on the permit, we have significantly reduced the number of logs we have purchased as we have no guarantee we will be able to economically dispose of wastewater,” said Lisa Tschampel, a spokesperson for Boise Cascade.

Boise Cascade told The Observer previously the DEQ restricted use of wastewater systems at the Elgin facility due to the presence of dioxins — toxic chemical compounds. The World Health Organization lists dioxins as “persistent organic pollutants,” which can cause cancer, reproductive and developmental problems, hormone issues and cancer.

In court documents, Boise Cascade contended the DEQ knew about the presence of dioxins in the water the plant water used. The company also asserted dioxin levels are low, and it was not aware of any resulting environmental or health hazard.

Tschampel said Boise Cascade’s $849.3 million in available liquidity was “not a factor in the potential to temporarily curtail operations” in Elgin.

Boise Cascade acknowledged last month the Elgin plywood plant had been profitable during both the second and third quarters of 2020. The plant produces roughly 10% of Boise Cascade’s dry veneer products and accounts for approximately 16% of its plywood sales.

The company’s reported nine-figure net income for the third quarter came in part from a “sharp increase in pricing” for plywood products. Boise Cascade attributed a 12% increase in the sales of their wood products “primarily to higher plywood sales prices” resulting from an imbalance between supply and demand.

However, the company warned that historically high pricing for its products could be on the decline, citing a 35% decline in the price of composite lumber during October.

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