Matthews Marking Products

Slow, Steady Recovery Seen for Western Mills

Lumber mills are starting to emerge from the worst downturn in the history of the industry and recovery will be slow yet steady, according to a new Western Wood Products Association.

WWPA predicts modest gains in housing, lumber consumption, and U.S. production this year after setting modern lows during 2009. While markets are expected to improve in the

Oregon Sawmills Fill Ghilean Void

February earthquakes that destroyed Chilean sawmills and plywood plants are bringing some badly needed business to wood product manufacturers in Oregon.

"No one really knows how long Chile will be out of the market-it could be six months, it could be the end of the year," said Hank Snow, vice president of human resources at Roseburg Forest Products, Dillard. "Our intention is to keep them."

He said that Roseburg has added more than 100 workers at its plants in Coquille, Dillard, and Riddle. About 35 of these were already employed part-time or on weekends. but were moved to fulltime status.

Swanson Group, Glendale, has not added any workers at its five Oregon manufacturing facilities, but has seen a welcome increase in both demand and prices for plywood-even as some of the Chilean mills restart. "But it's going to be a slow process," said president Steve Swanson. "And there's going to be significant demand for the wood products that those mills produce within their own country as they rebuild." coming years, lumber demand and housing construction will remain far lower that what the industry saw in the mid-2000s.

Oregon companies are hoping that housing demand will pick up before Chilean plants resume production. "Housing will be better this year than last, and it will be better next year than this year," said Swanson. "We're on the way to recovery, it's just going to be a long, slow road."

Demand for lumber in the U.S. is expected to increase 6.lVo in 2010 to 32.9 billion bd. ft., ending consecutive 2o%o-plus declines recorded the previous two years. WWPA anticiPates lumber demand to rise to 36.1 billion bd. ft. in 201| up 9.7Vo.

More housing construction will help boost lumber demand. Housing starts plummeted to 554,000 units in 2009, the lowest annual total since 1945. For 2010, total housing starts are forecast to increase l1.9Vo to 618,000 and then climb again in 201I to 719,000 units.

WWPA economic services director David Jackson said there are too many obstacles for a more robust recovery in housing. "Our country hasn't really resolved the key problems that led to this downturn." said Jackson.

Western mills may finally see some relief in the markets, with production in the region expected to rise 7 .lvo to I l billion bd. ft. this year. Output from western sawmills should rise again in 201I to 11.8 billion bd. ft.

The latest downturn further reduced thc nunrbcr of lunrbcr rnills opcratinu in the Wcst. Thc rcgion has f-evu'cr than 170 sawmills producing lun'rber toclal comparcd to 2ll7 mills opelutins a decade earlicr. Durin,s thc peak ycar in I 9137. whcn procluction totalecl 13.9 billion bd. l't.. therc rierc 70f nrills in thc West.

Lurrbcr production in thc South is fbrccast to increasc lrt a slo\\er ratc in 20 10. but still rernrrin abovc wcstcrn volunres. Sor.tthern nrills shor-rld 1tr-oduce I I .7 billion bcl. It. o1 lumber this 1'ear. lbout thc sauc volunrc as 2(X)t). Next ycar. production volunrcs in thc South shoulcl rise to 12.5 billion bd. tt.

Blaze Rips Plywood Plant

A Fcb. 27 firc causcd Sl rnillion in damagc at Enrcrald Forcst Proclucts. Eugene. Or.

"It was a big f ire." saicl district firc chicf Randy DcWitt. "lt's a ply'woocl plunt: thcrc's stacks and slacks ol lumber and plywoocl venecr rcadv to bc processed. It'sjust a hugc fire loacl."

When firefightcrs respondcd. thc1" found flamcs shooting through the rool' of onc of thc rnill's I'ivc structures. DeWitt saicl that clLrick action savccl thc other strLrctLlrcs. and that irlllrouc.h tlrt'hlrrzr clrrPted tltt linl: c'rpcratint hours all rvolkers were saftly evacuated.

The volLrnre o1' lurnbcr importcrl tcr thc tJ.S. clropped plccipitouslr in l00ll and 1009. 1'alling bl ncurly Iialf. Lunrbcr inrports. nrostly fklnr Cunudu. are lirrccast to incr-cuse 10.7r.,i to 9.fi billion bd. ft.

Assuming the Ll .S. clollar u ill weakcn. civing forcign lunrbcr procluccrs sc'lr.ttc cxchange ratc lrdl'antuges. irnport totals coulcl -rro"l to lr.('r billion bd. fi. by 20 ll.l)cspitc such un increasc. the volurne ol' lirreign lumbct' cntering the U.S. u'ill be lar bclori thc rccord 2.1.7 billion bcl. li. imported in l(x)5.

"lt's a significant firc loss: houerer' there's also nruch nrrlre ol'the structLrre ancl t'rusiness that \\'lrs savcrl." DcWitt saicl. "Thc nra.joritl' ot thc structLil'c was suvecl. ancl thcv shor-rkl resunlc partial opelations luirll quicklr'."

In 2008. Enreralcl sustaincd nbout $-5,000 in danlrge 1l'onr a hopper f ilc at thc nrill.