Plum Creek to invest $10 mil in local plants

A gradual increase in housing starts across the U.S. and better timber prices are two factors behind Plum Creek Timber Co.’s decision to invest $10 million in plant improvements at its Northwest Montana manufacturing plants.

“We’re optimistic overall for another good year,” said Tom Ray, Plum Creek’s vice president of northwest resources and manufacturing. “The largest single concern is the lack of raw materials, but we’re hoping Congress will address that.”

One of the largest landowners in the U.S., Plum Creek had a strong year in 2014, reporting earnings of $214 million on $1.48 billion in revenues. Harvest numbers were 13 percent over 2013.

But timber resources in Northwest Montana can be a concern. Last year, Plum Creek cut back hours for workers at the Columbia Falls sawmill from 40 hours per week to 36 after a federal court ruling blocked several timber sales on state forest land.

“We had a decline there, but once we get past breakup and into early summer, we’re hopeful to go back to a regular schedule,” Ray said.

Plum Creek plans to invest $6 million at its medium-density fiberboard plant in Columbia Falls. The No. 1 line, which was built in 1974 and manufactures panels up to 1 1/4 inches thick, will see $1.6 million for improvements to reliability and efficiency. Another $300,000 will be spent on computer equipment and monitoring cameras.

The company also plans to spend $2 million on the MDF plant’s No. 2 line, which was built in 2001 at a cost of $80 million and produces thin panels one-tenth of an inch thick. The furniture industry is a major customer, but other businesses now use MDF products.

“The client mix has remained remarkably steady,” Ray said. “High-value niche products like architectural doors with fancy veneers, we have a large presence in that market.”

The MDF plant employs about 180 workers, up from 135 four years ago. Work at the plant has recovered since an explosion last June caused about $10 million in damage. A bearing failure on a raw material feed belt caused fine fibers in the ductwork to ignite.

Plant employees were not laid off after the fire. They went to work making repairs and cleaning up, and in the end the shutdown caused minimal impacts to customers. Fiberboard inventories made up some of the demand.

The company also plans to spend $500,000 upgrading the Columbia Falls sawmill, including $300,000 for an optimizer and $200,000 for a feed system. Ray said it’s been more than 10 years since the company made any major capital improvements at the sawmill.

“We’re trying to be more efficient,” he said.

The sawmill employs 100 workers, down from 133 before the recession. The market for one-inch boards was strong last year and is expected to continue to improve. Severe winter conditions in much of the U.S. also affected the market, Ray noted.

“We’re confident as we move out of the deep freeze across the nation, that market will improve again,” he said.

The plywood plant in Columbia Falls will see $300,000 in technology upgrades, including a composer scanner upgrade. The plant employs about 150 workers, down from about 175 before the recession, but plywood demand is strong.

“The market has been really steady,” Ray said. “We’re trying to get into high-value niches, different product niches such as plywood for furniture.”

Plum Creek will also invest about $500,000 at its Evergreen sawmill and $600,000 at its Evergreen plywood plant. Nearly 200 employees work at the two facilities.

All told, the company employs about 750 workers in Montana, including about 100 at its administrative offices in Columbia Falls. The payroll in the Flathead is expected to be more than $60 million this year.