Last mill standing 

Missoula's Roseburg Forest Products plant perseveres

Ken Cole walks alongside neatly stacked towers of particleboard, which look something like Lego buildings inside the massive 350,000 square-foot Roseburg Forest Products plant on Missoula's Westside. Over the machinery's hums and metronomic clunks, Cole hollers, "I'm going to show you why we're still here."

Cole, the plant's manager, presents its state-of-the-art melamine line, installed in 2006. The German-made machine, about as long as a football field, stamps a layer of melamine—a durable thermosetting plastic—on top of large, rectangular particle boards. The melamine layer, colored to resemble wood grain, gives this compacted sawdust the look of solid wood furniture, and it's sold as shelving and other finished products directly to hardware stores around the West and Midwest like Lowe's, Home Depot and Menards.

"We've really been concentrating on trying to go further down the production stream to actually put value into our product," Cole says. "That's one of the key components to our facility—the vertical integration, where we actually take our raw particle board, add value to it, make shelving out of it, make furniture-grade products, and just try to be our own customer to a certain degree. That's really worked out well for us...That's the reason we're still here."

With Smurfit-Stone Container Corp. closing its Frenchtown linerboard plant last week, and with the Stimson Lumber Co. mill in Bonner shuttering in 2008, the often overlooked Roseburg plant—Missoula County's 11th highest taxpayer—is, in fact, the only large mill still here. Cole says surviving in an industry long in decline, and worsened by a floundering housing market, can be attributed to the company's focus on value-added products.

This emerging business model, says economist Larry Swanson of the Center for the Rocky Mountain West, will be key to Montana mills staying solvent as the wood products industry continues its evolution.

click to enlarge Ken Cole, manager of Missoula’s Roseburg Forest Products plant, says the mill’s melamine line allows it to add value to its particleboard, which has helped to keep layoffs to a minimum. - PHOTO BY CATHRINE L. WALTERS
  • Photo by Cathrine L. Walters
  • Ken Cole, manager of Missoula’s Roseburg Forest Products plant, says the mill’s melamine line allows it to add value to its particleboard, which has helped to keep layoffs to a minimum.

"Our traditional industry in wood products, particularly mills making dimensional lumber, has been at the bottom of the competitive food chain and fighting an uphill battle to remain competitive for a long time," Swanson says. "It transitioned from large diameter to small diameter logs over the '90s, but its future will largely lie in smaller firms able to use the materials we have in areas of niche manufacturing and higher valued products."

Still, no mill is immune to today's market. Missoula's Roseburg plant is currently operating at only 60 percent of capacity, down from about 70 percent in 2008. It ran at full capacity—about 180 million square feet of particleboard—between 2003, when Roseburg bought the plant, and 2007, Cole says. The slowdown led to 15 people being laid off in 2008, and another 15 in 2009, Cole estimates, reducing the plant's workforce from about 190 to 160.

"There's no question we're asking people to do more than we ever used to," Cole says.

Roseburg, a privately owned company based in Dillard, Ore., is one of the largest particleboard producers in North America, operating six plants in the United States. It also runs about a dozen more plants producing various other wood products like plywood, and employs some 4,000 people nationwide. In recent years the economy's forced the company to shutter a handful of mills.

Despite the market conditions, though, Cole praises Roseburg for continuing to invest in new equipment to give his employees a competitive advantage.

"One good thing that we have done—and this is probably the strength of Roseburg—is that we have strategically invested, even this last year, in a few pieces of key equipment that reduce the cost of our product, that are helping us stay competitive in our market," Cole says. "That's wonderful that Roseburg is willing to invest even in a down market right now."

Those investments, says Todd Morgan, director of Forest Industry Research at the University of Montana's Bureau of Business and Economic Research, will give Roseburg a leg up when the market rebounds.

"I imagine consumption is going to start increasing from the really low levels that we're at now," Morgan says, "which is probably good news for the mills of all types in the United States and elsewhere that made it through this really bad period and are still able to hang on. Now might be a period of revitalization for them."

Another investment Roseburg has hoped to make locally is tapping Missoula's landfill for methane gas to power the plant's boilers. Energy costs, next to raw materials supply, is the biggest factor in the plant staying in the black, Cole says.

"The landfill gas project is still a project that we have on our radar screen, and we're still working with Allied Waste to figure out exactly the best way to capture the gas and to utilize it in our facility," Cole says. "Currently, the market's so bad that there's not a lot of capital, and it takes a little bit of expense up front to be able to get that in place."

On their own, none of the goings-on at Roseburg—the few layoffs, the new equipment investments, the prospects of piping in Missoula's landfill gas—make headlines. But in a community hit hard by a wave of bad economic news lately, no news from Roseburg is good news.

"We're just kind of quiet out here," Cole says, "head down and trying to survive."

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