Sawmills preparing for ffnew normal"

[rrtrrncrNc FRoM THE DEEPEST downturn in the industry's I-lhistory. 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 5O7o from 2005 to 2009. Mills cut output as prices crashed, with some product such as framing lumber selling for 6O7o 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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ment," he said.

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 dor'"'n markets. u/e'vc bccn ablc to increase our business to thcsc customers."

Mills are changing how thcy supply lumber to customers. Sicrra Pacific Industries lumber sales managcl Bob Shepherd said his mills are sclling more specified tallies and rnixcd cars than befbre. reflecting the changing buying patterns of their custotre rs.

J.D. Dcishcr of Gcorgia-Pacific Wcst is l'intlirrg wuys lo tet m()re \nriety ol'lcngths in slnallcr shipments for custonlcrs.

Sinrpson [-unrber Co. installed double trim saws at its rnills to cut shorter lengths. "Wc now have more flexibility in cr-rtting to ll-. l0- and l2foot products that our customers want." noted Laurie Creech. Sirnpson sales manager.

Other rnills have expandecl their product offerings. John Stemblidge at Swanson Group Manufacturing, Glendale. Or.. said their mills are now cLrttin_s 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 aclclition to their fiaming and pine boarcl otfbrin-us.

SPI has added zlx4 and 4x6 white fir to its prodr-rct line.

Enhancing lumber quality and appcarancc is a priority for many mills in the West. Shepliercl said SPI has focused on "doing a better .job at the mill" to not only manufacture those product\ thut urc rrrosl in dernand. but to ensure the quality the customer expects is there as well.

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

The emphasis on quality gocs bcyond the cutting better lumber. Stimson's Schmitt said they havc changed to heavier paper wrap on lurnbcr to better protect open car shipnre nts in transit. A number of mills said thcy will be antistain treating bolh grcen and kiln-dried lumber to kccp thc products bright and clean when thcy rcach thc yard.

The difl'icult rnarkct condition over the past year havc forccd mills to review thc crcdit they offer to buyers and bc more selective in extending terms. At the same time. mills have tried to become more flexible with Iong-standinu customers.

As one sales executive noted. "We arc working with people who have bccn working with us."

Many said that buyers who are honcst about thcir financial conditions will havc a better opportunity to clevelop long-term relationships with rnills that can benefit both parties.

With lumber inventories low throu-shout the market. the prospect of increasing sales will tcst rnills' ability to deliver lunrber to all customers when they need it. Since 2005. west- ern lumber production has shrank by sontc 4J(h, or 9 billion bd. ft.

Should markcts come to lif-e, mills will bc hard prcsscd to push production up quickly.

Lumber buyels who have stuck with mills throu-{h the tough times will have a le-{ up in gettin-r the supply they need once markcts 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 -uood tirnes as well as bad."

Bcsed in Annopolis, MD, Fletcher Wood Solutionso) is the lorgest monufocturer of de{ect-free, oppecronce grode rodioto pine products in New Zeolond. Distributing our clecr boords, mouldings, LIFESPAN" treoted wood, ond lumber to the North Americon morket through our proven ond completely integroted supply choin, Fletcher Wood Solutions@ mointoins direct occess to one o{ the lorgest FSC certified'a pine plontotion forests in the world.

Bv Kellv LeCouvie