Plant to reopen with new owner.

Byline: Joe Mosley The Register-Guard

SPRINGFIELD - McKenzie Forest Products, a plywood manufacturer that emerged from the bankruptcy of its predecessor nine years ago, has been sold to the rapidly growing Swanson Group wood products company of Grants Pass.

The plywood plant has been closed for a maintenance overhaul since June 20 - two days before the deal closed - but is expected to be back in operation by July 9.

"Out of the gate, we plan to operate real consistent with the way McKenzie operated it," said Chuck Wert, Swanson's executive vice president.

"We will obviously be looking for opportunities to improve the process as we gain a better understanding of it.

`Over 24 months, we plan to make some fairly significant investments in the facility."

Neither Swanson officials nor the Springfield mill's previous owner would discuss terms of the sale on Tuesday.

McKenzie Forest Products operated the plant with about 250 employees, but its deal with the Swanson Group was an assets-only sale - meaning the employees were not guaranteed their jobs under the new owner.

Wert said the plywood plant will now be operated with about 230 employees - a "significant number" of them holdovers from McKenzie. And wages gradually will be raised to the same scale that is paid to employees at Swanson's plywood mill in Glendale, near Grants Pass.

"I believe it's excellent news for the employees there (in Spring- field)," Wert said.

Swanson Group is the longtime owner of lumber, plywood and veneer mills in Glendale, and the Swanson-Superior Forest Products lumber mill in Noti.

The company began its current expansion by purchasing Roseburg's former Sun Studs mill in 2001, then added a lumber mill in Glide two years ago.

Steve Killgore, who helped resurrect McKenzie from the ashes of bankrupt Springfield Forest Products in 1998, said last month's sale will allow the mill to continue growing.

"It was pretty much in dire straits when I got involved, so I'm proud of what we did there," Killgore said. "We built it into something that had value. But ultimately, you've got to make investments in these kinds of things."

Killgore's partner in the ownership of McKenzie Forest Products was General Electric Capital Corp., which he said "had lost interest in further investments" at the Springfield facility.

"The thing I liked about the sale is it was a win for everybody," Killgore said. "The employees are going to have employers who are going to invest significant capital. They're going to be around for a long time."

General Electric Capital was the largest secured creditor in the 1997 bankruptcy of Springfield Forest Products, and received most of the $14.1 million that was paid for the company a year later.

Killgore said the sale of McKenzie Forest Products will allow him to devote more time to a second venture he entered into in 2004 - Cascade Structural, a glue-laminated beam company in Chehalis, Wash.

He purchased the company along with Andy Storment of Eugene, and the pair added a lumber-processing facility to their operation last year.

"That, coupled with trying to run McKenzie at the same time, was a little cumbersome," Killgore said.

Paul Ehinger, a Eugene-based timber industry analyst, said the Swanson Group's purchase of McKenzie Forest Products should be seen as a positive development for the Springfield facility.

Timber products firms are feeling the pinch of a nationwide slowdown in residential building, but the Swanson Group is better situated than most to expand, he said.

"The McKenzie plant has had its ups and downs," Ehinger said. "The Swanson Group has run a plywood plant down in Glendale all these years. They're basically an aggressive outfit that's trying to grow, so they're adding (facilities) where they seen an opportunity.

"They know plywood, they know forest products and they know logging. I don't try to outguess why people do certain things, but they have the knowledge and expertise within their corporation to move ahead."

The McKenzie Forest Products mill produces specialty industrial siding and sanded plywood products, while Swanson's Glendale plant focuses more on sheathing and underlayment products.

"We see opportunities to work the mills in unison, to increase market share in both areas," said Wert, Swanson's executive vice president. "We're very interested in gaining market share in the industrial (products), and McKenzie brings us that opportunity."