Eugene sawmill breaking ground on $60 million upgrade

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registerguard.com – Seneca Sawmill Co. announced Friday it has started a $60 million upgrade of its west Eugene lumber mill.

Paving crews were flattening a corner lot of Seneca’s Highway 99 mill site Friday to prepare for construction of two dry kilns, part of what Seneca described as a “major investment” in the company’s future.

“This upgrade will allow us to continue improving our sawmill capabilities, and get more lumber out of the tree,” Seneca General Manger Todd Payne said.

Founded by Aaron Jones in 1954, Seneca has grown from a 25-employee outfit producing 18 million board feet of lumber per year to a 450-employee operation with capacity for 650 million board feet today.

By spring, the addition will double the number of dry kilns that Seneca uses to process dimensional lumber — strips of Douglas fir up to 28 feet long, far longer than the 8- to 10-foot lumber fed through its stud mill.

Dimensional lumber is ideal for building large commercial and industrial buildings, Payne said, while wood from the stud mill is used mainly for home construction.

The company doesn’t disclose its revenue, and Payne declined to say how many board feet of lumber the mill is producing. But, he said, demand has risen steadily since the depths of the Great Recession.

Seneca’s buyers from across the country are increasingly asking for kiln-dried lumber instead of “green” lumber, which contains more moisture and is prone to shrink as it dries naturally.

With the upgrades, “we’re investing in our ability to move a greater portion of our product to dry lumber,” Payne said.

The work will raise Seneca’s investment in property and equipment to $125 million over seven years when it’s complete. Much of the previous spending was for a cogeneration plant that burns wood waste, sells power to Eugene Water & Electric Board, and uses steam from the plant to operate its dry kilns. The $45 million-plus cogeneration plant opened in 2011.

Seneca’s latest expansion follows a wave of expansion or reconstruction plans announced by local wood products companies. Weyerhaeuser Co. is in the midst of a $55 million modernization of its west Eugene floor- and roof-beam factory, citing increased demand from a rise in home construction.

The International Paper linerboard mill in Springfield recently announced it is considering making $100 million in upgrades to its paper products machines.

The Swanson Group has said it will start this summer on a rebuild of its Springfield plywood mill that burned to the ground last year.

Each of those projects has received or applied for multimillion-dollar tax breaks.

Springfield and Lane County granted International Paper an estimated $8.5 million in property tax waivers this week. The state’s enterprise zone program allows tax exemptions to new or expanding businesses in eligible areas. Those tax breaks typically range from three to five years, and often hinge on the company creating new jobs.

But International Paper’s deal allows it to shed up to 20 percent of its workforce.

Weyerhaeuser is seeking $2.1 million to $2.4 million in tax breaks from the city of Eugene for its modernization, while saying it can’t guarantee adding any workers. A scheduled city council work session to discuss the proposal was postponed last month, and the tax break is up in the air.

Swanson Group secured approval of an estimated $4 million to $5 million in tax breaks to rebuild its Springfield mill.

Payne said Seneca officials hadn’t decided yet if they will apply for tax breaks under the enterprise zone program.

“We have not applied at this point. We’re still discussing it,” he said.

Once complete, Seneca’s work will likely spur a “small net increase” in employment at the firm, Payne said.

Despite the planned spending by local wood products firms, employment among Lane County wood products employers has been largely flat since 2009, according to U.S. Bureau of Labor Statistics data.

Mill owners have said that modernization and technology has resulted in fewer jobs in some cases as mills have become more efficient, but that the jobs being created are higher paying and offer more opportunities for workers.

An average of 3,418 workers were employed at Lane County wood products companies last year, the data show, barely higher than the 3,324 in 2009.

The county had 4,919 wood products jobs a decade ago.

Source: www.registerguard.com