China log demand fuels Stimson layoffs
Around 45 jobs lost at Hagg Lake mill as market abroad gobbles up uncut logs
High demand for logs in China is forcing Stimson Lumber, Co., to reduce its workforce at its mills in Oregon, says company CEO Andrew Miller.
Stimson announced last week it will shed 45 or 50 jobs at its Hagg Lake mill. Tuesday the company announced cuts of 30 to 35 at its Tillamook mill.
The staff reductions are the result of fewer logs making it to the mills due to increased demand for export logs. With Chinese buyers willing to buy a freshly cut log from Oregon at about $125 more than Stimson can afford to, the company is buying fewer logs from private landowners in Oregon and Washington and relying more on their own stock.
'The adjustment we're making is to trim our operations back to what is our own [company-owned] timber,' Miller said.
China wants logs, not lumber
China's high-speed development, fueled in large part by massive infrastructure projects creates demand for large logs which can be cut on site in order to frame up concrete molds and supports for other building materials. That means two-by-fours and the kind of cut lumber that Stimson's mills produce isn't a popular export commodity. And state rules bar the export of unprocessed timber from state lands, where Stimson also cuts.
With timber from private lands heading east, Stimson's mills have less work and, Miller said, that means layoffs.
"The landowners love it," Miller said. "They're getting prices for trees that are up in the same region as when we had that big building boom."
And not every region is affected by the rise in Chinese demand. Stimson's Idaho mills are hiring, expanding their operations slowly to keep up with demand.
Exporters haven't figured out how to effectively move logs from Idaho to the coast and keep costs below the price at the dock, Miller said.
"There are people who are trying to export out of Idaho, but the numbers don't really work," Miller said.
Even with the cuts, though, Miller isn't looking forward to a mill closure in Tillamook or Forest Grove, he said.
"We've made investments in these communities," Miller said. "If you close a mill down it's tough to get it going again."