WesternLumber Output Hits 10-Year High

Sawmills in the West rode a record wave of lumber demand in 2004 to the highest annual production volume in l4 years, according to Western Wood Products Association.

Portland, Or.-based WWPA reported production at Western mills rose 6.67o to 18.8 billion bd. ft., the highest volume reported since 1990, when 20.8 billion bd. ft. was produced. The estimated wholesale value of 2004 production was $7.99 billion.

WWPA released final industry totals for 2004 following its annual survey of more than 260 mills operating in the West.

While Oregon remained the top lumber producing state, Washington finished a strong second with the best production year since 1930. Lumber mills in the Washington increased producrion ll.4vo to 5.46 billion bd. ft. Oregon lumber production was 7.13 billion bd. ft., up 9.l%o from 2003.

Together, the two states accounted for more than two-thirds of the region's lumber volume in 2004 and 32Ea of total U.S. lumber production. California increased production by 47o to 2.76 billion bd. ft., while Idaho was modestly higher than the previous year at 1.96 billion bd. ft.

Production at other Western states in 2OO4 was: Montana, 985 million bd. ft.; South Dakota, 188 million bd. ft.; Wyoming, I 14 million bd. ft., and the Four Corner states (Arizona, Colorado, New Mexico and Utah) 167 million bd. ft. Alaska, which is not included in the Western totals, produced 45.8 million bd. ft.

A remarkably strong housing market and expanding economy pushed U.S. lumber demand to its fourth consecutive record year. Americans used 61.8 billion bd. ft. of lumber in 2004, up 8.4Vo from the previous year.

Nearly 27 billion bd. ft.-an alltime high-was used in new home construction, as housing starts were up 5.8Vo to 1.96 million units. Lumber used in repair and remodeling also set new highs, totaling 19.5 billion bd. ft. The two markets together accounted for some 75Vo of the lumber used in the country.

Production in the South reached a modern-day record of 18 billion bd. ft. In the past l0 years, production in the South has increased by 23Vo.

Record demand also brought record lumber imports to the country. Some 23.5 billion bd. ft., or 387o, of the lumber used in the U.S. last year came from a foreign country.

Canada was the largest import supplier, shipping almost 2l billion bd. ft. into the market. Europe, which a decade ago sold virtually no lumber in the U.S., increased shipments by 5l%o to 1.36 billion bd. ft.

ldaho Mills Get Biomass Grants

As part of its Woody Biomass Utilization Program, the U.S. Forest Service will present $4.4 million in grants to encourage businesses to find more ways to make money from small-diameter wood, beetle-killed trees, and underbrush that could fuel forest fires.

"I'd much rather have it in the marketplace than go up in smoke," said Undersecretary of Agriculture Mark Rey.

Recent recipients include England Sawmills, North Fork, Id., which will use its $250,000 grant to help pay for a dry kiln to expand the mill's capacity from 750,000 bd. ft. to 9 million bd. ft. annually. A grant of $125,000 will help buy a post and rail processor for Panhandle Forest Products. Cocalalla. Id., while a $76,000 grant will buy a small log chipper for Big Sky Products, St. Regis, Mt.

The goal, according to Rey, is to find uses for the wood choking western forests. After presenting the checks, he said that the grant recipients have "created a natural resource out of something that was useless or had no value."

Depot Finds Home In Frisco

After a decade-long battle, Home Depot will build its first store in the city limits of San Francisco, Ca.-a city that doesn't like chalns or big boxes.

The two-level, 140,000-sq. ft. store will be built on the former site of Goodman's Lumber, in an industrial area of Bayview and Bernal Heights. "The project is proposed on a site that used to have two large warehouses," said Evette Davis, a Home Depot consultant and spokesperson for the project. "I think it's really going to enhance that part of San Francisco."

Supporters wanted the convenience of a Home Depot in the city, the promise of jobs for local residents, and the $500,000 in taxes and other fees that the store would generate for the city.

In order to gain approval, Home Depot agreed to scale back plans from 153,000 sq. ft. and provide 100 per- manent, year-round jobs to local residents. The chain also must complete a traffic-effects study within l8 months, cooperate with the city to manage day workers who are expected to congregate at the store looking for work, and pay $1.9 million in affordable-housing fees.

Opening of the new store is scheduled for 2007.

Logging Fight At Tongass

A plan that would have allowed logging on roadless areas in Alaska's Tongass National Forest has been put on hold by a federal appeals court.

The U.S. 9th Circuit Court of Appeals ruled that a 1991 plan adopted by the U.S. Forest Service exaggerated the demand for Tongass timber, ignored the impact of logging on wildlife, and didn't adequately consider options for cutting timber in fewer roadless areas.

The Forest Service is reviewing the recent decision, which temporarily blocks a pending logging project and requires development of a new plan for Tongass. "We're going to spend the next couple of weeks assessing all our options," said Forest Service spokesperson Dennis Neill.

Tongass is the largest national forest in the U.S., covering 17 million acres in southeast Alaska, of which 9 million have no roads. The 1997 plan allowed logging on 3.9 million acres, 607o of which are roadless.

The timber industry didn't like the plan because it didn't allow for enough logging. "This is how much wood our industry needs, and the Forest Service can supply that off a tiny portion of the national forest," said Owen Graham, executive director of the Alaska Forest Association. "We'd like them to get their work done correctly and start providing that amount of timber."

He said that more than six mills have closed, and mill jobs have fallen from several thousand to 700, because not enough logs are coming from Tongass.

The fight here inspired a 2001 Clinton administration order barring timber cutting and development on all national forest lands without roads. In 2003, the Bush administration exempted Tongass from these protections. By this year, the entire plan had been abandoned in favor of a program that would give states more say over these roadlesss areas.

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OSB lmports Yet To Make A Dent

Even though U.S. imports of OSB have risen tenfold over the last five years, they remain a fraction of domestic production and no cause for alarm for North Amerian producers.

More than 14 billion bd. ft. of OSB was produced in the U.S. last year, according to APA-The Engineered Wood Association. In contrast, OSB imports grew from 34 million bd. ft. in 2000 to 330 million bd. ft. in 2004. By the year 2010, the number of imports is expected to reach 650 million bd. ft.

"The addition of new low-cost OSB production capacity in the U.S. and Canada over the next three to five years, combined with an anticipated softening of the domestic housing market, is likely to make the U.S. market less attractive to offshore producers," said APA's Jack Merry.

Rising log and transportation costs, as well as exchange rate fluctuations can also affect international trade patterns, he said.

Brazil is the largest single offshore supplier, said Meny. Other major exporters of OSB include Ireland, Germany, France, and the United Kingdom.

To maintain a competitive edge, U.S. companies invest in research and state-of-the-art equipment. At LouisianaPacific's new 70,000-sq. ft. research center in Nashville, Tn., scientists focus on improved products made from lessexpensive raw materials. According to Jay Tanzer, L-P's senior scientist and facility engineer, "You want to know it won't fail."

Yet the need for more efficient products has never been greater. "Oil has had a major impact on adhesive costs, and the cost of wood has gone up," said Bob Palardy, manager of quality and technology for OSB at L-P. "We're continually trying to lower our costs of production and find ways to use our resin more efficiently."

Extreme Makeover For Depot?

Two Home Depot stores planned for California and Florida indicate that the chain will improve its looks to win city approval and attract more women shoppers.

When Home Depot approached officials in Tehachapi, Ca., the company received a blunt response. "We told them we don't want a big, ugly, orange box," said assistant city manager Greg Garrett. Plans submitted to the city Aug. I illustrate what Garrett calls "the most beautiful Home Depot in the country."

Described as being in the Arts & Craft style, the structure will have 139,099 sq. ft., with a portico over the main entrance and stone accents.

When asked when the new store will open, city officials said there is no reason to rush the process. "We don't need to fast-track it," said city manager Jasn Caudle. "We want to take the time to do it right."

In Pembroke Pines, Fl., the chain wants to lose its cold and foreboding warehouse look and adopt a "female friendly" prototype. Plans submitted to officials here reflect this new approach.

"More than 5OVo of the decisions about what products to buy in our stores are driven by women," said Don Harrison, a Home Depot spokesperson.

As a result, plans for the 140,000-sq. ft. store show a "warmer retail feel, softer than their typical store, and more women-friendly," said Joe Carosella, president of the Retail Property Group of Boca Raton, developer of the property that Home Depot rvill anchor.

Outside, the nerv store's fagade will include glass and design f'eatures such as towers along the roof. Instcad of the typical chain-link fencc. an enclosure rvith ornamental designs will separate thc garden center.

Inside the store. stock will be stacked just l2-f'eet high-instead of to the rafters. Aisles ivill be rvider and ner.v fluorescent lighting lvill be uscd. A "store-rvithin-a-store" called Design Place r'vill showcase design, d6cor and appliances.

"ln older stores. these are scattered throughout the store." said Harrison. "Putting them in one area will make them more accessible." Since decisions on big ticket items take more time, said Harrison. Design Place rvill "have a quiet area to make decisions."

Worker Hurt At Fox Lumber

After a conveyor line accident July 25, an employee at Fox Lumber, Laurel, Mt.. had part of her arm amputated.

The cmployee rvas cleaning near a conveyor bclt rvhen hcr hand caught rvhile trying to removc something. Becausc of privacy lar.vs. the woman's name was not releascd. but she had rvorked at Fox Lumber ftlr more than a year.

"lt r.vas a difficult and traurnatic thing fbr all of us, and it's just getting started for her." said Quintin Apedaile, the company's director of operations. "We do hope that she is able to return to rvork for us. We see see her as a valuable employee."

Apedaile said that the accident highlights the potential danger of all mechanized equipment. "All these things that help us to get our rvork done and to make our lvork simpler. r.vhether at work or at home. if lve use them wrong, they can be very dangerous." he said.

Al For Wood Drying Industry

An artificial intelligcncc program could dramatically decrease the amount of time and energy needed to dry lumber, according to an expert at Pennyslvania State University.

"A computer would essentially read the environment in the kiln for this to work," said Charles Ray, assistant prof-essor of forest resources at Penn State. His process r.vould analyze kiln and wood conditions, anticipate future conditions, and make adjustments accord ngly.

Such adjustments lvould minimize deviation from optimal drying conditions, r'vhich can cause r,varping and other def'ects. In contrast. traditional drying techniqucs react to changes after they occur. These programs are. according to Ray, "basically r.vhat rve call'reactive' -control set points change in reaction to the current state o1'thc kiln."

"Good dry kiln control packages arc currently available." said Ray. "but we believe our controllers are unique." However, commercial availability of the program is "at least still two to threc years away."

Panel Quashes U.S. Tariff Appeal

A Nnrre, panel has rejected an appeal by the U.S. to maintain punitive duties on imports of Canadian softwoods.

"This is a big win for Canada, especially because it's unanimous," said analyst Paul Quinn. The ruling "essentially says the U.S. has not proved its case that the U.S. lumber industry is harmed by imports of softwood from Canada."

The announcement caused stock prices of leading Canadian producers, including Canfor and Tembec, to rise sharply, with some predicting that the U.S. would finally stop collecting tariffs and begin to refund the $4.13 billion collected over the last three years.

Yet, a spokesperson for the U.S. Trade Representative said the decision "will have no impact on the antidumping and countervailing duty orders," and the Coalition for Fair

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Lumber Imports vowed to continue challenging the constitutionality of N.qrra.'s dispute settlement provisions.

"The U.S. lumber industry will not allow U.S. sawmills, mill workers, and family timberland owners to be crushed by unfair imports," said coalition chairman Steve Swanson.

The group also insists that the World Trade Organization has indicated that it will stand behind the U.S.'s claims when it issues its own final ruling next month.

Perco's Hurwitz Wins Lawsuit

A federal judge in Texas has ordered the FDIC to pay $72 million in attorney fees and interest to a company controlled by Charles Hurwitz, chairman and c.e.o. of Maxxam Inc., which owns Pacific Lumber Co., Scotia, Ca.

The FDIC will appeal the judgement, the largest ever awarded against the government. The government agency filed the lawsuit in 1995. to recover the $1.6 billion lost when United Savings of Texas failed in 1988. Hurwitz owned nearly a quarter of United Savings, through a holding company that later became Maxxam.

Two years before United Savings failed, Hurwitz's company had acquired PALCo in a takeover and increased logging of its timberlands. In 1999, amid mounting pressure from environmentalists, Maxxam agreed to sell thousands of acres of old-growth forest for $480 million-creating the Headwaters Preserve.

ln 2002, another government agency settled with Maxxam for $206,000 and the FDIC dropped its lawsuit. The same year, Hurwitz and Maxxam countersued for legal fees paid during its 17 -year battle with the government.

In his ruling, the Texas judge maintained that the Clinton administration, lawmakers and environmental groups had used the FDIC's lawsuit as a "political weapon" to force Hurwitz to sell the old redwoods. Government officials-and Maxxam's own general counsel-said the swap was Hurwitz's idea, a way to make dismissal of the FDIC case a part of the Headwaters deal.

Window Manufacturers Honored

A new awards program has been launched to recognize outstanding performance among different categories of building products.

Market Resource Associates, Inc., Minneapolis, Mn., presented its inaugural Best In Class Awards to vinyl and composite window manufacturers that received consistently high marks for customer service in its recent market research study.

Award winners include Harvey Industries, Waltham,

Ma., for best regional vinyl window manufacturer; Integrity by Marvin, Warroad, Mn., best composite window manufacturer, and Simonton Windows, Parkersburg, W.V., best national vinyl window manufacturer.

The next BICAs will be awarded for entry doors in January at the International Builders' Show in Orlando, Fl.

Moulding Maker On The Move

Braided Accents, Hayden, Id., has acquired a new 22,000-sq. ft. manufacturing and warehouse facility.

LARGER new quarlers and machinerv will allow Braided Aicents to increase proddction of hardwood millwork.

The new facility features 13,000 sq. ft. for inventory and administrative offices and 9,000 sq. ft. of manufacturing space, including a new Weinig moulder, gang rip saw, computerized template maker, and knife grinding equipment.

Owners Clint and Cheryl Bower expect to move in early October.

Washington Protects Forests

Harvesting of old-growth timber on state trust lands in western Washington-mostly on the Olympic Peninsula-has been banned.

Preservation of the trees will be part of the state's policy for sustainable forests, which will be adopted this fall. An estimated 88,000 acres is affected by the decision, although most of that is already protected from logging by habitat and conservation agreements and various regulations. Just 1,000 acres will be protected for the first time.

About 2.1 million acres of forest trust land are protected by the state, which sells the timber to raise money for public needs such as school construction, universities, county government, and fire districts.