Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, May 27, 1990 TAG: 9005250030
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: GREG EDWARDS BUSINESS WRITER
DATELINE: SELMA LENGTH: Long
As quickly as the truck was emptied, he hopped back in and headed to the woods for another load, not stopping long enough to see how much the sawmill was going to pay for his logs or to pick up his check.
Nowadays, the hardwood lumber and log trade in Western Virginia is as solid as a stand of tall white oaks. And, thanks to an increasing demand for Appalachian hardwoods by foreigners, particularly in Western Europe and the Far East, it's a more stable business than ever.
Last year, according to the state Department of Forestry, Virginia had 900 logging companies, employing about 5,000 people. Those loggers supply some 400 Virginia sawmills. Two-fifths of the mills are in Western Virginia.
The 30 workers at Stephen Bennett's mill turn logs - mostly red and white oak and poplar - into hardwood lumber for tables and chairs, couches and sofas, flooring and cabinets. Some of it Bennett sells to exporters and the lesser quality heartwood goes to a maker of forklift pallets.
Bennett was a logger before he was a sawmill operator. While he was still in high school, he cut pulpwood on his father's dairy farm on Rich Patch Mountain and sold it for spending money.
While he worked on a drafting and engineering degree at Dabney Lancaster Community College at Clifton Forge in the early '70s, Bennett continued logging on the side. "A truck cost you about $600 and that was the total investment in the whole thing," Bennett recalled.
Although he was training for a different career, Bennett, who liked working outdoors, knew what he wanted to be.
It wasn't socially proper to be a logger, though, and Bennett recalled that his mother continued to look for a another job for him for about five years. "I looked for about a week," he said.
Bennett built his logging business during the 1970s and was one of the Westvaco paper mill's biggest suppliers of pulpwood. The recession of the early '80s forced changes.
"I got sick and tired of being put on quotas by the other sawmills," he said. So Bennett made an $8,000 investment in an old sawmill at Selma. He soon discovered the mill couldn't saw as fast as he could cut trees and he invested in another at New Castle.
After the November 1985 flood sent the New Castle mill toward the Chesapeake Bay, Bennett drew up plans for a new and bigger mill at Selma and built it in 102 days.
Bennett invested $1 million in building and equipment in the new mill, which is fully automated with conveyors that carry rough lumber from the saw in one direction and scrap wood another.
Similar to the way a pilot flies a helicopter, the sawyer or saw operator directs the cutting operation from a glass-enclosed cab with two hand controls. A red industrial laser marks a line on the logs where the blade makes its cut.
Last year after Hurricane Hugo flooded the market with timber that needed to be salvaged, Bennett pulled his loggers out of the woods to help at the mill. Bennett produced 7 million board feet of lumber in 1989 and grossed a little over $3 million in sales.
"The whole secret of this business is to know as many people as you can know," Bennett said. The more people Bennett knows, the more potential customers he has for his products. Bennett has a customer for every fiber of the logs he buys.
Scrap boards from the saw's first few cuts are turned into wood chips and sold to Westvaco in Covington to be made into paperboard. And Westvaco makes commercial carbon from Bennett's sawdust. Even the bark is sold for mulch - five tractor-trailer loads a week.
Most of Virginia's sawmills sell their wood scraps in one form or another, said Elvin Frame, supervisor of marketing for the Virginia Department of Forestry. About 94 percent of all byproducts of sawmills are being used, he said.
A sawmill, like other forest products businesses, depends heavily on U.S. home construction cycles.
"Our industry goes as the economy goes for Harry Homeowner," says Bennett. "If the economy goes down, we're one of the first guys to get it because we don't furnish the necessities of life."
The market for softwood construction lumber is currently weakened because of the decline in the housing market, said Randy Bush, executive director of the Virginia Lumber Manufacturers' Association. But the demand for softwoods used for treated lumber and the demand for hardwoods has remained stable, he said.
Foreign markets provide more of a safety net than a cushion for loggers and sawmills when construction cycles enter a trough, said Boyd Carr, a log exporter from Richmond. Tom Beard, a Greensboro, N.C., lumber exporter who also buys from Bennett, agreed. "If we had not had the export market the past few years, we would have lost many sawmills," Beard said.
The United States is the leading exporter of hardwood lumber and among the top 10 exporters of hardwood logs, according to the U.S. Department of Commerce. Of the $2.25 billion in U.S. forest products exported in 1988, $1 billion was represented by hardwood lumber, logs and veneers.
The export market has been growing for the past eight years and has grown "tremendously" in the past five or six, Bush said.
The value of Virginia's log and lumber exports grew from $37 million in 1986 to $56 million in 1989. The vast majority of those exports were hardwoods, said Don Buck, an international trade specialist with the Virginia Department of Agriculture and Consumer Services.
Bennett said he has always exported some but increased his export sales of both lumber and logs in an effort to move some of the wood coming onto the market in the wake of Hurricane Hugo.
The market is a lucrative one, too. Top-quality veneer logs can bring around $2,000 apiece and saw logs for export up to $800 to $900 per 1,000 board feet.
The value of the dollar with respect to other currencies helps determine the demand for U.S. log and lumber exports. But other developments have also fed the rapid growth of exports.
The demand for U.S. hardwoods picked up after a stiff tax effectively banned the export of lumber from Southeast Asia, said Beard, the North Carolina lumber wholesaler. The Southeast Asians have decided they want to export finished products instead of their raw materials, he said.
Also, having a big effect on the demand for Appalachian hardwoods, said trade specialist Buck, is an environmental campaign in Western Europe against the use of tropical hardwoods. Buck recalled seeing a very graphic commercial against tropical wood on European television in which the legs of young children became saplings and were felled by a swinging blade.
Japan is the largest single importer of U.S. hardwoods, followed by Canada, West Germany, Taiwan and the United Kingdom. Over half of Virginia's exports, however, went to Western Europe last year. Roughly 11 percent went to Japan.
But the share of the Mid-Atlantic market going to Japan and the Far East has increased dramatically during the past five years, said Ray Owens, an economist with the Federal Reserve Bank in Richmond.
Loggers and lumber producers are taking steps to improve their ability to export, Owens said, including: shortening delivery times, expanding marketing efforts, and making personal contact with customers and potential customers in their home countries.
Ensuring the quality of the product is of the utmost importance for those interested in exporting logs or lumber, Buck said.
Buck advises those interested in exporting not to take anything for granted and have all the terms of the contract spelled out before they take an order. Being on time with shipments is also important, he said, because "the ship may have sailed."
The state offers help to loggers or sawmill operators who are interested in exporting, Buck said. (They should call him at (804) 786-3953.)
Those connected with the export of hardwoods expect the business to continue at its current levels or to grow. Besides a demand for top-quality veneer logs and for high-grade lumber for furniture makers, markets are also emerging overseas for medium-grade hardwood products, Buck said.
Virginia has the potential to sell up to $15 million a year in hardwood dimension products - pre-cut wood for the furniture industry, Buck said. Another potential export product for Western Virginia, Buck said, is hardwood chips for paper making. Japan, Taiwan, Korea and Italy have all shown an interest in chips, and Virginia could be doing $15 million in business in 90 days if a chipping facility were available, Buck said.
Perhaps because of the potential to export, the Virginia lumber business has remained stable for the past several years. Since 1975, Virginia sawmills have turned out more than 1 billion board feet of lumber, hardwood and softwood, each year.
In 1988, 552 million board feet of pine lumber and 706 million board feet of hardwood lumber were produced in Virginia.
But the log and lumber business is only one segment of a much broader forest products business that plays an important role in the Virginia economy.
Forest products industries - which also include furniture factories, veneer mills, pulp mills, plywood and particle-board makers, and the manufacturers of wood byproducts like turpentine - employ one in every seven people in Virginia's manufacturing sector and pay one in every eight dollars paid in manufacturing wages.
Total employment related to the forest products industries in Virginia hovered between 60,000 and 70,000 between 1970 and 1989. Roughly two-thirds of those people worked for furniture or paper manufacturers.
Virginia, three-fifths of whose land area is covered in forests, is a natural home for forest-based industries. More than three-fourths of the state's 15.4 million acres of timberland are privately owned. Forest products industries own 11.9 percent, the federal government 11 percent, and the remainder is owned by state and local government.
by CNB