Mendocino Gives Former Palco Fresh Start

It's been a busy summer for Humboldt Redwood Co., Scotia, Ca., the new company formed when Mendocino Redwood took over Pacific Lumber Co.

After linal reorganization papers were signed July 30, transition teams from Mendocino Redwood's headquarters in Ukiah, Ca., quickly assessed the condition of Pnlco's timberlands, took inventory at its mill in Scotia, and extended employment offers to about 300 of PRt-co's more than 350 former employees.

Many of these former employees also received personal phone calls from Richard Higgenbottom, who serves as c.e.o. of both Humboldt Redwood and the Mendocino Companies, which celebrated its lOth anniversary last month.

"I think it was the appropriate thing to do," said Higgenbottom of the calls he made, since the 18-month bankruptcy proceedings had disrupted so many lives.

By August 4, Pnlco's former sales office had reopened for business. Two days later, the sawmill in Scotia was up and running, log deliveries were accepted, and lumber shipments for existing orders became available.

In a letter to customers, Higgenbottom stated that two important goals for the new company were to implement Mendocino's forestry practices and position the Scotia sawmill to be successful for the long term.

"For the mill," he said, "we will change the philosophy from a cost-driven approach to a market-driven approach. For customers, we hope this will have the practical result of allowing us to reliably provide the product you want, when you want it, with excellent and predictable service at a fair price."

Sandy Dean, c.e.o. of Mendocino Redwood and a major player in the reorganization, said that success will be linked to the health of the new company's 210,000 acres of timberlands in Humboldt County.

"This is a forest that's been managed aggressively," he said. "But it's a forest that has tremendous habitat value and a tremendous amount of standing timber." The new company has already applied for Forest Stewardship Council certification of these lands.

Under Pnlco, an average of 150 to 160 million bd. ft. was cut from 2000

Homboldt Redw.'od COMPANY. LLC

to 2005. That figure dropped to 99 million bd. ft. in 2006, and fell to 77 million bd. ft. last year. Under the new management, annual harvesting will be limited to 55 million bd. ft. per year for the next decade and a no-cut policy for old growth will be observed.

"We chose a harvest rate that's based on careful assessment of the timber inventory," Dean said.

Although he expects the harvest rate to increase after l0 years, it will always follow Mendocino's principles of sustainable forestry-which include cutting less than what's grown.

These principles, which have

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