Alaska timber: making do, but making it.

That darn Alaskan timber industry - it just won't go away. Despite massive cuts in the wood supply, the loss of the two major industrial facilities and countless smaller downsizings, the Alaskan timber business, from Ketchikan to the Tanana Valley, is adapting to a new environment emphasizing value-added manufacturing, local partnerships and a woodbasket that taps both public and private sources.

"We just make do with what we've got and not worry about what might happen," says Allen Menaker, operations manager for Northland Wood Products in Fairbanks, a firm that could be viewed as a model of what is to come.

Northland, which also sells general building supplies, employs about 25 people. A dozen work for the firm's sawmill operation, which produces white spruce lumber harvested from the Tanana Valley. Northland turns about 2 million board feet (mmbf) of it into building lumber for the Fairbanks construction market annually.

A dozen jobs does not equal 400, so it would be foolish to compare Northland to, for example, Sitka's now-closed pulp mill. But 2 mmbf is also not the 100 mmbf or more guarantee which a pulp mill would need in order to operate.

Ten mills like Northland's could yield 120 jobs for 20 mmbf. And, even in a political climate that consistently draws howls of protest from loggers and manufacturers alike, many are of the opinion that a local supply goal of 20 mmbf might actually be attainable.

What Does Value-Added Mean?

One thing that rankles veterans of the old timber industry in Southeast Alaska is the people that think value-added is a new concept.

"What does value-added mean?" says Jack Phelps, executive director of the Ketchikan-based Alaska Forest Association. "A sawmill is adding value - a pulp mill adds value. 'Value-added' (means) creating jobs and economic activity. The (Ketchikan) pulp mill created 1,000 high-paying jobs." The Sitka and Ketchikan pulp mills were indeed value-added facilities - turning low-grade utility logs into high-grade, easily transportable pulp that was then converted into rayon cloth, automobile tires, and synthetic sponges and rope overseas.

But pulp and its products are a little hard to imagine leading to the kind of vertically integrated timber industry most Alaskans envision when they talk about value-added products. Beyond the loggers, and truckers and pilots and primary wood processors - the public sees building lumber retailers, furniture makers, and other manufacturers of specialty wood products.

A big trend in building - both domestically and overseas - is the increasing use of "manufactured wood products" such as wood beams or planks made from smaller pieces of wood or even chips, and engineered to meet or exceed the performance of all but the finest of naturally-grown products.

Interestingly, one of those top-notch natural products is the boreal white spruce found in much of Southcentral and Interior Alaska. White spruce is known for being light, and having long, flexible fibers, making the material excellent for finest bonds of paper. When air-dried at a facility like Northland Wood Products, white spruce is prized by airplane and boat builders.

Mid-Size Southeast Comes Back

Ketchikan Pulp Company's plan to return to the local fray as a structural veneer plant is progressing well, reports Acting President Dick Leary. Also faring well are the details of a proposed joint venture between KPC and the Sealaska Corporation, Southeast Alaska's largest private landowner.

The type of veneer to be produced in Ketchikan could be purchased by other Southeast firms and processed into laminated veneer lumber (LVL), a glued-and-layered product that is increasingly taking the place of pure wood beams. Or, KPC itself could spin off an operation to make LVL. KPC's parent company, Louisiana-Pacific is" a big player in the LVL market," Leary says. The joint venture could integrate their two strengths. Sealaska has timber, and a desire to earn as much as they can from their wood. Value-added does just that.

Although the community of Ketchikan is steadfast in its support of the veneer plant, an operation with expected timber needs of about 40 mmbf annually could use a supply-rich partner.

The Tongass Land Management Plan calls for a cut on the whole Tongass National forest of up to 267 mmbf. But timber industry experts doubt - because of lawsuits and administrative delays - that the Tongass will yield much more than 200 mmbf. Some pessimists and environmental interests say that a cut of 100 mmbf might be more realistic.

Meanwhile, hopes were raised in Wrangell by the announcement to reopen the former Alaska Pulp Corp. sawmill, the town's economic mainstay, by long-tone area timber firm, Silver Bay Logging, Inc. Additionally, an Idaho guitar-top manufacturer is trying to relocate to Sitka. Throughout all of the region, small operators are buying portable, gas-powered sawmills and cutting up the logs cleared for new construction.

And the region's bellwether, entrepreneur Steve Seley, who is establishing a mid-sized sawmill in Ketchikan, has fought what surely won't be his last fight over supply Seley's operation was hailed by environmentalists as part of the new direction for the industry they favored, but then, astonishingly, opposed a Prince of Wales Island (PWI) timber sale slated to support Seley's new firm. Tim Bristol, a timber issues organizer for the Southeast Alaska Conservation Council (SEACC), says that the Prince of Wales Island area has been extensively logged and that residents of two fishing hamlets, Point Baker and Port Protection, (population 57 and 58, respectively,) vehemently opposed the sale. Bristol said there were two nearby timber sales that were much larger, and unopposed. But each involved extensive roadbuilding and a large pre-paid bond. Bristol said Seley was interested in a smaller sale, but the USDA Forest Service was unable to break off parts of the larger ones for him.

"It's an inertia situation," Bristol says. "The Forest Service just keeps grinding away with these big sales (that get appealed.)" On another part of PWI, SEACC is pushing a "citizen's alternative" which splits a larger sale into 11 other sales offering between 11,000 board feet to 5.5 mmbf, to fit a variety of smaller firms. And Bristol is still optimistic about SEACC's ability to work with Seley and find acceptable timber for his operation.

"As far as Steve goes," says Bristol. "He's going to go into some area (to log) and we're not going to challenge him."

Staying Ahead of the Kenai Beetle

Terry Nininger, a vice president and one of the principals of Circle DE Pacific Corp., a chip mill in Homer, says that the spruce bark beetle devastation is so intense on the Kenai Peninsula that 90 percent of the trees on some parcels are dead.

Beetle-killed trees are still valuable for several years for sawlogs and for some years after that for wood chips, but as time ticks on, some private landowners are getting worried.

"Politics has changed in the last five years," Nininger said. "At one time there were reservations on the part of local landowners (about cutting timber on their lands). But as they see the beetle attack resolutely advancing upon their dead wood lots, they realize the critically urgent thing to do is remove those trees and get the land replanted." Although some criticism has been leveled at the state for going slow on sales from state lands despite the need to harvest beetle-killed wood, Nininger pegs public agencies at only being about a year behind schedule.

"(But) we're at a critical point and we've got to move ahead on these sales," he says.

State forester Jeff Jahnke agrees with the need to harvest more trees on beetle-kill lands - but more for habitat reasons - than to keep from losing valuable fiber resources or money.

"Without harvest, we won't have any revenue to do the regeneration activity we need to maintain the spruce," Jahnke says.

Kenai lands that are covered by dead trees won't re-generate by themselves, fear foresters. They say the tracts of dead trees, since they will not re-seed naturally, will permanently revert to grasslands that are unproductive for wildlife, as well as loggers. Bear and moose will disappear, they say, to be replaced by woodpeckers, field mice and like small creatures.

The solution is re-planting. It is not being done in many areas, due to the expense. However, Circle DE has planted nearly a million seedlings in the last two years.

Nininger told the Alaska Resource Development Council recently: "We anticipate that (in the future), the only trees growing on the Kenai may be those in areas that we harvested and were replanted by loggers."

Hailed as doing a better job has been the Chugach Alaska Corp., a regional Native corporation whose lands stretch from Cook Inlet to the Malispina Glacier west of Yakutat. Chugach is a supply giant, whose venture with Koncor Forest Products on Montague Island ends this year just as the two firms embark on a 15-year, 300 mmbf project at Carbon Mountain, east of Cordova. The project is expected to pump $137 million into the local economy and provide 100 local jobs for the fishing town. This is just the kind of news Southeast towns used to receive when a large local sale was opened up.

"Things are changing," muses Mark Stahl, manager of lands and resources for Chugach Alaska. "When I got up to Alaska it was a totally different landscape. The government agencies have been cut off at the knees in being able to do anything (to supply timber.) And that has shifted the emphasis onto private lands." Chugach's Montague cutting has been done by Koncor, another large supplier of timber from lands on Afognak and Admiralty Island. Koncor will also oversee the harvest on the Carbon Mountain project.

But even Koncor, which has maintained a 100 mmbf harvest for the last five years, is looking at value-added operations, says company president John Sturgeon. New manufacturing processes using lower-grade logs would fit the company's needs quite nicely. All prospective value-added partners have to do is what they have always had to do - meet the export price.

Cabinets to Cabins from Interior Forests

An Alaskan wood product gaining notice is coming out of Dry Creek, 40 miles east of Delta Junction. There, Logging and Milling Associates is making tongue-in-groove log siding from white spruce.

The pieces, fiat on three sides, fit together for both interior and exterior applications. The fourth side is rounded and the final appearance is comparable to the look of real logs.

About 100 trucks a year barrel into Dry Gulch with white spruce for the siding - and for the log cabin building kits that make up most of the firms business. That's about 550,000 board feet per year for this three-family partnership now in its 18th year.

In Nenana, Mike Holst is less content. The general manager of Nenana Lumber, Holst had overseen 22 employees less than a year ago now, he's down to two, he says, due to his inability to get a 177 acre piece of timberland that the state withdrew from sale consideration after the parcel drew objections from environmentalists.

All Holst needed was a half a million board feet to keep his workers busy, but alternatives to the lost sale have been slow in coming. Only a relative handful of people make their living off the Interior forests, "but there's thousands and thousands of people that make their living off tourism," Holst says. "They're going to outweigh us and they've decided everything will stay natural."

Holst says he doesn't believe State of Alaska promises to put up more land for value-added firms. He says efforts to do so have been mired for years in rule-making or political delays.

"We were able to support a crew of 22, right here in Nenana where we have 80 percent unemployment," Holst says. "And the state would let us go down the tubes because of an inadequate timber supply."

Regional state forester Les Fortune defends the state's record in the area - pointing out that Holst's was the only sale that was stopped while ten went through. The state is managing to put up about 1,000 acres of forest land annually, averaging 10-15 mmbf. That's 'politically' sustainable, explains Fortune. Asked what would be biologically stable, Fortune answers that the whole forest - if put on a 100-year rotation, could up the output 20 times.

Wood products manufacturers are becoming increasingly creative in what they consider a usable tree. Smaller and smaller trees are being handled in computerized sawmills. Birch goes for bowls. New uses are found for cottonwood. Even the lowly black spruce, an Interior species that hardly ever grows more than six inches in diameter, is being looked at for, of all things, swimming pool furniture! Fortune said a special 'value-added sale' is being offered from state land in the Tok area - 6 mmbf that could be taken all at once or the harvest stretched out over a decade.

Perhaps, harkening back to Allen Menaker's flexibility at Northland Lumber, should be the timber industry's mantra as it strives to survive with the ups and downs of supply.

"We're not only a sawmill, we also retail building supplies," Menaker said. "So, if we have plenty of (timber) supply, we make as much lumber as we can. If we don't have plenty of supply, we buy to fill in. If we make more lumber than we can sell, then we wholesale.

"We just make do with what we've got and try not to worry about what might happen.'