In a deal consistent with the trend of increasing consolidation and globalization in the timber industry, Plum Creek Timber Company, Montana’s largest private forest landowner, announced last week that it is acquiring The Timber Company, a subsidiary of the Georgia-Pacific Corporation. The merger, valued at approximately $4 billion, will make Plum Creek the second largest private timberland owner in the United States, with more than 7.9 million acres in 19 states.
“These are huge companies. Some of them are applying for status as their own separate biospheres,” jokes Greg Schildwachter of the Intermountain Forest Industries Association, who nonetheless predicts the deal will not have much effect, if any, on Montana’s timber industry.
John Gatchell, conservation director for the Montana Wilderness Association, says that this latest merger reflects a growing need by Plum Creek to diversify its land holdings into new areas, as much of the virgin timberland in Montana has been liquidated in the last 30 years and cannot remain as productive as it once was. Montana cannot compete in the global economy using current logging practices, he says, especially against regions like the southeastern United States, New Zealand or South America, where trees grows faster and labor costs are lower.
Gatchell adds that it was the aggressive harvests and road-building practices of the last 30 years by Plum Creek and Champion International that had an enormous impact on watersheds and wildlife habitat, forcing public land managers to scale back harvest projections on the national forests.
“That really hurts the few locally owned firms, because they rely on the national forests. So they’re getting squeezed by the big boys,” says Gatchell.
With many small, family-owned mills having a tough time competing, at least six small Montana mills are seeking federal protection. Jim Hurst, part owner of Owens and Hurst Lumber Company in Eureka, has proposed a five-year plan that would preclude the large timber companies from bidding on a percentage of federal timber sales.
“The ‘bigs’ are going to make it for five years. A lot of us ‘smalls’ won’t,” says Hurst. “My focus is to try to preserve the small mills in these rural communities because if we’re gone, there’s going to be some real severe hardships for towns like Eureka and Seeley Lake and St. Regis.”
Hurst says his proposal would reserve the first volumes sold off in the national forest in Montana for small businesses and independent loggers, who can log using more environmentally sound principles. Short of halting logging on all national forests, it’s a plan attractive to many environmentalists.
“I think there’s a big future and a lot of work to be done in restoration forestry in western Montana,” says Gatchell. “I think that should be aimed at locally owned contractors and loggers. Those are the people who have the long-term interest in mind.”