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 Simpson Timber has plenty of logs to mill, but the markets are slow, so the Longview mill is shutting down for a week to reduce inventories. Bill Wagner / The Daily News
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Shutdown ordered at Longview Simpson mill
Tuesday, February 5, 2008 5:36 AM PST
By Erik Olson
Printable version
E-mail this articleTacoma-based Simpson Timber is curtailing its Longview sawmill operations this week in response to the slumping housing market and low lumber prices.
The shutdown leaves about 100 employees at the mill temporarily out of work and eligible for unemployment, said Dave McEnntee, Simpson's vice president of operational services and external affairs.
The mill was receiving logs Monday, McEnntee said. Company officials will evaluate when to reopen the mill to produce lumber on a week-by-week basis, he said.
"As we take downtime, that affects inventory. It just depends on where prices are in the marketplace," McEnntee said.
It's the second curtailment in a month at the Longview mill, which produces 2-by-4s, 2-by-6s and other lumber from Douglas fir trees. Simpson last cut work hours at the Third Avenue mill on Jan. 21 for one week, then reopened the mill the week of Jan. 28, McEnntee said.
The price of lumber has been plummeting as the demand for housing has slowed nationwide this year. At the start of the month, the price was $238 per 1,000 board feet - a 15.6 percent drop from February 2007, according to Random Lengths, a timber industry trade publication.
Simpson's Longview curtailment is one of 18 planned at mills located across the Northwest, according to paper industry analyst Claudia Shank Hueston of JP Morgan. That list includes the Shelton sawmill owned by Simpson, a privately held company.
The Longview mill is one of five listed as shutting down for a week starting Monday. Others, such as the Hampton Lumber mills in Morton, Wash., and Willamina, Ore., the Seneca mill in Eugene and the Rosboro Lumber mill in Vaughn, Ore., are shutting down operations indefinitely, according to JP Morgan.
Simpson bought the Longview mill from Caffall Bros. at the end of 2006 for $26.5 million, a year after purchasing 35 acres from the Port of Longview to build a mill at that location. The port has first buyback rights for the property it sold for $2.16 million, and Simpson must obtain port approval before selling the property to anyone else.
Simpson officials have said the purchase of the Third Avenue mill doesn't affect its plans at the port, though port officials have worried a new sawmill won't be built. McEnntee said the curtailment at the Third Avenue location is unrelated to any future plans at the port property.
Port and Simpson officials have been discussing the future of the property since the beginning of the year, said Ken O'Hollaren, the port's executive director. He expects a joint announcement on the land within the next few months, though he declined to give details.
The curtailments are not a surprise, O'Hollaren said, considering the state of the lumber market.
The slumping housing market has claimed other mills as casualties of curtailment in recent months. Weyerhaeuser's Green Mountain mill carved away its weekend shift at the start of the year until May, and it has curtailed operations around the Thanksgiving and Christmas holidays for the past two years.
The Federal Way-based timber giant is building a new, consolidated facility on Industrial Way in Longview to replace the Green Mountain mill. The cost-cutting measure will eliminate 130 jobs.
Weyerhaeuser has no plans to curtail any more shifts from the Green Mountain mill, company spokeswoman Kate Tate said.
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