ugg boots cleaning kit Plum Creek’s Evergreen stud mill hums back to life
“I went back to college for a couple of years, got two degrees,” Schelling said. “Then I went out to the oil fields, driving a semi truck. I just got tired of being away from my family and my home and my lifestyle. This is like divine intervention. I’m a happy camper.”
After 19 years working for Plum Creek Timber Co., Schelling was one of 63 workers laid off at the Evergreen stud mill in 2009. That same week, Plum Creek shuttered its Pablo mill. Another 90 workers hung their hardhats on the mill site fence, assuming they’d never come back.
A year earlier, Plum Creek announced it was selling 320,000 acres of its Montana timberland to the public in the Montana Legacy Project. housing market had collapsed, buried under the rubble of a national banking system riddled with toxic mortgages.
So the announcement last week that Plum Creek was revving up its Evergreen mill and adding back 30 jobs wasn’t just a shift in the business cycle. For many, it was proof of life in one of the giants of Montana’s industrial community.
Schelling was hoping to use his certifications in building and advanced cabinetry to find work in the Kalispell area. Instead, two days after he left the oil patch, Plum Creek announced it was reopening the Evergreen stud mill.
“This is my second go around opening up a mill,” he said. “I was here for the groundbreaking in 1989.”
The company that started as a family owned lumber firm in Columbia Falls in 1945 was eventually sold to the Northern Pacific Railroad, and eventually spun off as a giant and independent wood products business. It has operations in 19 states, owning 6.4 million acres. While its base is in Seattle, 60 percent of its 1,200 employees live in Montana. Davidson Co. who follows Plum Creek. “I think they’re there for the long haul. Every stock that’s a housing play is reflecting the robust housing recovery at this stage.”
Over the past year, Plum Creek’s (PCL) stock has gone from a low of $35.42 to a current high of just under $50 a share. Its 2012 sales were up 15 percent over 2011 at $1.33 billion. And its net income was up 5 percent ($203 million) over 2011. Nationally, housing starts have jumped 30 percent between 2011 and 2012, and still remain just half of what the historic normal level has been.
Plum Creek vice president for Northwest resources and manufacturing Tom Ray took that post in 2009, just when the bad news was flowing fastest. At the Columbia Falls headquarters, Ray said the company’s determination to make specialized wood products saved it.
“We went through a lot of gut wrenching decisions about how to position ourselves just to survive,” Ray said. “We certainly had some tough years. We tried to put new products into the pipeline and do things other people can’t do. If we tried to be a straight commodity producer, where we sit here in Montana, we probably wouldn’t have survived.”
This year, Plum Creek plans to invest about $5.8 million in its Montana manufacturing facilities, up from $3.6 million last year. Some of that goes into upgrading the Evergreen mill’s equipment.
“It took us two days just to replace all the lightbulbs,” said mill manager Padraig Hagan. “We’ve had to replace bearings,
replace some motors. The optimization scanner was the biggest challenge. Some of those parts were way out of calibration, and when you’re programming something that old, there aren’t many people who know how to replace them.”
When it’s running with one full shift, the Evergreen plant should turn out about 40 million board feet a year of 2 by 4s and 2 by 6s. It will also create ripples through the rest of the Inland Northwest timber market.
For example, the Evergreen plywood plant next door only uses the lower portion of trees in its yard. The tops, with diameters of 7.5 inches or less, got lopped off and sent to stud mills in Idaho.
Now those tops will go across into the stud mill. And stud mills, unlike plywood plants, create shavings and chips that feed Plum Creek’s medium density fiberboard mills in Columbia Falls. That cuts into the amount of chips and shavings Plum Creek bought from other private sawmills in the region.
While the company remains the largest private landowner in Montana with more than 900,000 acres in its portfolio, Plum Creek has sold more than 400,000 acres recently to public land trusts. It also has another 34,000 acres on the open market in Montana. Ray said in the past few years, it’s sold about 2,000 acres annually.
That doesn’t count the 310,000 acre Montana Legacy Project put together with Plum Creek, The Nature Conservancy and Trust for Public Lands. Forest Service or Montana Department of Fish, Wildlife and Parks, TNC continues to manage large portions as timberland.
“They’ve been very easy to deal with, both the folks at the mills and in the procurement division,” said Nature Conservancy associate state director Bee Hall of his Plum Creek counterparts. “We enjoy a pretty good relationship with them.”
TNC does not release the amount of timber it’s delivering to Plum Creek under a 10 year fiber supply agreement that was part of the Legacy Project. But Hall said the opening of the Evergreen stud mill meant redirecting a lot of logs that used to go to other mills.
Ray said Plum Creek has no plans to open any additional mills besides Evergreen. Nevertheless, that brings the company’s workforce up to 650 manufacturing jobs when the stud mill starts full operations later this month.
Plum Creek has another 100 employees in Montana, including all of its national information technology staff and server farm. It has 12 foresters in Kalispell, six in Libby and four in Missoula (down from 15 before the Montana Legacy Project).
“I would think over next three to five years we’ll be fairly status quo, with everything coming back up,” Ray said. “We’re at a pretty nice equilibrium here in the valley between wood supply and demand. If you think about the housing cycle, it’s really hard to project more than three to five years out. We’ll see what this up cycle brings, but at some point, this is a cyclical business and you always have to deal with the downturns in the future. Hopefully this will be a long ride up,