Sawmills preparing for 33new normalu

[rvencrNc FROM rHE DEEPEST downturn in the industry's I-rhistory, lumber sales professionals at western sawmills are preparing for a "new normal" in selling and serving their distributor customers as markets recover.

Both mills and distributors have seen dramatic changes in the past few years. Demand for lumber plummeted by more than 5OVo from 2005 to 2009. Mills cut outDut as prices crashed, with some product such as framing lumber selling for 60Vo less than four years ago.

On the distribution side, scores of lumberyards and wholesalers closed or filed for bankruptcy. The pace of consolidation accelerated, while economic conditions put stress on financing and credit for lumber purchases.

Relationships between mills and customers-long a key part of the lumber business-will take on even greater importance as sales start to recover. Many mill sales executives said fortifying those relationships are a priority.

Steve Schmitt, vice president of marketing at Stimson Lumber Co., Portland, Or., said his sales staff has been traveling more to meet with dealers. "We pride ourselves in standing behind our products. Going out to meet with our customers is the best way to demonstrate that commit-

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Other mills are becoming more involved with their customers' businesses. Mark Porter, mill sales manager with Hampton Lumber Sales, Portland, said his company has spent more time evaluating what their customers need,

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"We've been doing this with many of our key buyers and have been successful," said Porter. "Even with the down markets. we've been able to increase our business to these customers."

Mills are changing how they supply lumber to customers. Sierra Pacific Industries lumber sales manager Bob Shepherd said his mills are selling more specified tallies and mixed cars than before, reflecting the changing buying patterns of their customers.

J.D. Deisher of Georgia-Pacific West is finding ways to get more variety of lengths in smaller shipments for customers.

Simpson Lumber Co. installed double trim saws at its mills to cut shorter lengths. "We now have more flexibility in cutting to 8-, l0- and 12foot products that our customers want," noted Laurie Creech, Simpson sales manager.

Other mills have expanded their product offerings. John Stembridge at Swanson Group Manufacturing, Glendale, Or., said their mills are now cutting wider widths, up to 2x12, instead of the 2x4 and 2x6 products they cut predominately in the past.

Jim Scharnhorst, Idaho Forest Group, Coeur d'Alene, Id., said his mills are expanding in cedar products in addition to their framing and pine board offerings.

SPI has added 4x4 and 4x6 white fir to its product line.

Enhancing lumber quality and appearance is a priority for many mills in the West. Shepherd said SPI has focused on "doing a better job at the mill" to not only manufacture those products that are most in demand, but to ensure the quality the customer expects is there as well.

Simpson has introduced a "Gold Label" premium line for lumber, which Creech says has been popular.

The emphasis on quality goes beyond the cutting better lumber. Stimson's Schmitt said they have changed to heavier paper wrap on lumber to better protect open car shipments in transit. A number of mills said they will be antistain treating both green and kiln-dried lumber to keep the products bright and clean when they reach the yard.

The difficult market condition over the past year have forced mills to review the credit they offer to buyers and be more selective in extendins terms. At the same time. mills have tried to become more flexible with Iong-standing customers.

As one sales executive noted, "We are working with people who have been working with us."

Many said that buyers who are honest about their financial conditions will have a better opportunity to develop long-term relationships with mills that can benefit both parties.

With lumber inventories low throughout the market, the prospect of increasing sales will test mills' ability to deliver lumber to all customers when they need it. Since 2005, west- ern lumber production has shrank by some 47Vo, or 9 billion bd. ft.

Should markets come to life, mills will be hard pressed to push production up quickly.

Lumber buyers who have stuck with mills through the tough times will have a leg up in getting the supply they need once markets heat up.

"Our best customers are those who understand that we rise and fall together," said one sales manager. "Those are the people we want to do business with, in good times as well as bad."