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Innovation and dependabitity make up the fibers of our company and the products we create.

We understand that your customers count on you to seek out the most distinctive and retiabte new products. That's why we've led the industry in devetoping innovative timber products, [ike Accuruff ', our rough-sawn product with a uniformty appLied rustic f inish, and Tru-Dry', the most consistentty and eventy dried Dougtas fir product avaitabte. We are committed to providing you with outstanding forest products that remain strong and beautifuI for generations.

Sierra-Pacific Bids on Palco

Sierra-Pacific Industries, California's largest private landowner and the second largest lumber producer in the U.S., has made an offer to buy Pacific Lumber Co.'s mill and 35watt cogeneration plant in Scotia, Ca., for $45 million.

Redding, Ca.-based Sierra-Pacific plans to invest another $30 million to create two separate mills on the Scotia site-one for large logs and the other for small logs. SPI would also close its mill in Arcata. Ca.. and move those workers to its new operation, said spokesperson Mark Pawlicki.

SPI is also seeking a l5-year agreement for cutting rights on Pnlco lands. "These logs will form the backbone of production at the new Scotia mills, but we will modernize and expand capacity to handle SierraPacific's own harvest on company lands as well as logs from throughout the region," said president A.A. "Red" Emmerson.

Sierra-Pacific is not interested in the 210.000 acres of timberland that Mendocino Redwood wants to buy. "It has redwoods with a high value; it would be a very expensive proposition," said Pawlicki.

He added that Mendocino initially made a bid for the Scotia mill and the land, but it was rejected. "The bond holders are owed $700 million, so that gives you an idea of how much the land is worth."

For now, everyone waits for the final decision of Judge Richard Schmidt, who has presided over P.tLco's bankruptcy proceedings for more than a year and a half.

However, Emmerson is hopeful. "We are excited about our proposal," he said. "We believe that the best technology and the best people will take the Scotia mill into a brieht and vibrant future."

Harwood Files Chapter 11

Harwood Products. Branscomb. Ca., filed for bankruptcy protection on May 23. The company has not made payments on its $2.7 million loan from Wells Fargo since January, when it shut its doors and laid off more than 200 employees.

"They're wanting to force an auction," said Art Harwood, the third generation of his family to run the mill. The bankruptcy halts the auction, which was scheduled for early June, and allows the nearly 60-yearold company to reorganize, obtain crucial new loans, pay off its current debts, and reopen.

Harwood Products typically borrows operating capital each year and then pays off the loans when its wood products are sold. However, since the company was behind in loan payments and lenders have tightened their requirements, Harwood could not obtain the $l million needed to restart.

"The ironic thing is, with the current market conditions, if we were up and running, we would be making money," Harwood said.

Forty years ago, the Harwoods were forced to sell thousands of acres of timberland and their mill in Willetts, Ca. The family then focused on its Branscomb mill. When the 1990s brought increased regulations and a dwindling supply of large trees, the company succeeded by focusing on specialty wood products.

In the late 1990s, Harwood spent millions expanding the mill's capacity and installing high-tech equipment that allowed it to mill smaller logs. Now, Art Harwood is optimistic that the company can survive the current downturn. "We're hoping," he said. "We think we can."