Longtime sawmill weathering troublesome market
Published 6:00 am Monday, March 2, 2009
Despite a downturn in the national housing market, the operatorsof one of Brookhaven’s oldest businesses say they remain committedto the community it serves.
While at least five other sawmills around the state havesuccumbed to the struggle, Columbus Lumber has resisted curtailmentand still offers its employees 40 hours per week, owners said. Logsstill arrive, the great saws and blades still bite and sales arestill made, keeping approximately 110 Southwest Mississippians -mostly Brookhavenites – employed.
In addition, the company has diversified with a top-of-the-linenew product, pre-shaped fence boards, and has also expanded intooverseas markets.
“We are doing the things we need to do to mitigate the pressuresthe market has put on us,” said Columbus Lumber co-owner JeffGrierson.
Grierson said the company’s two new overseas markets, which hedid not identify for proprietary reasons, have been “instrumental”in keeping the mill open.
Before the forestry industry’s downturn began in 2007, there wasno need to ship lumber out of the country, he said, because thedomestic demand for Southern Yellow Pine – an abundant resource inMississippi – was so great. Now, Grierson said one-third of thestate’s mills have begun exporting lumber.
The pre-shaped fence boards Columbus Lumber builds have alsohelped the mill escape some of the market’s fangs.
“We’re blessed to have this,” said co-owner Doug Boykin. “Thehousing market has been hit far worse than 30 percent, and neitherthe exported lumber nor the fence board have been affected by newhousing starts.”
New housing starts, an economic indicator describing the numberof new homes being built in the country, are what started thecurrent turmoil.
Grierson said housing starts stood at 1.9 million in January2006. Last month, that number had fallen by approximately 75percent to 475,000, he said.
With the collapse of the national housing market and its impacton Mississippi’s forestry industry, the 65-year-old Brookhavensawmill has had to make hard decisions over the last 18 months. Itlaid off 40 employees, shortened its work week and reduced thevariety of both logs purchased and lumber produced.
Grierson said such changes have led to rumors around thecommunity that the mill is on the verge of closing. But compared toother mills around the state, Columbus Lumber is actuallyprospering as best it can.
“We’ve had to match up supply with demand as best we can… andall those things have caused some concern,” said. “But our partnersin our banks know exactly what we’re doing and they’re behind us100 percent.”
Until Americans have the finances and confidence to beginbuilding homes again, Mississippi’s sawmills will have to helpthemselves. But Grierson and Boykin are fighting for them, takingthe industry’s cause to the doors of state and federal leaders andsharing their experiences and ideas.
Grierson is the newly elected president of the MississippiLumber Manufacturers Association – which represents 24 sawmills inthe state – and chairman of its new Legislative Affairs Committee.Likewise, Boykin serves on the executive committees of both thenational and Mid South Building Material Dealers Association.
Both men have met with Gov. Haley Barbour in Jackson and thestate’s congressional delegation in Washington, D.C., within thelast month to bring the forestry industry’s struggles into thepolitical arena.
“We told (government leaders) that without some kind of help,over the next eight months we would start to see more sawmillsclose,” Grierson said. “Time is of the essence.
“But we don’t want a handout,” he continued. “We would be morethan happy to accept a federally-backed loan program that smallbusinesses could draw from to help offset operating expenses.”
Grierson, Boykin and MLMA have proposed just that. In theWashington meeting, they began seeding the idea of a $75 millionloan program that would allow each of MLMA’s 24 sawmills to draw$2-$3 million over an 18-month span to help them recover frommonths of operating on negative returns.
Grierson said the proposed program carries the same costs as theinstallation of a new interstate overpass or interchange, and issimilar to Louisiana Economic Development programs that funneled infederal loans to help recovery from Hurricane Katrina in 2005.
“You can’t just run to the (government) and holler, ‘Help, help,help! The sky is falling,'” he said. “It’s helpful to give themideas of how they can help.”
While in Washington, the sawmill owners also reminded federalleaders of the importance of the forestry industry inMississippi.
Though it has suffered in the economic downturn, it is still thestate’s second-leading industry, with a $17.4 billion economicimpact. Grierson said the industry’s 123,000 jobs account for 8.5percent of all Mississippi employment, delivering $4.4 billion inwages annually.
Grierson and Boykin are also hoping for the repeal ofMississippi’s inventory tax, saying the state is one of only 13that levy such a tax. Raising the state’s harvest permit limit from84,000 to 88,000 pounds, a move that would improve the efficiencyof logging operations, would also help sawmills, they said.
No legislation has been approved, however. And even if it were,the road to recovery would still be a lengthy one.
“There’s no quick fix to this market,” Boykin said. “This isn’ta sprint; it’s a marathon.”
In the meantime, Grierson sad Columbus Lumber would continue tooperate on a simple strategy that has carried it this far.
“The only thing you can count on is that we will be consistentlyinconsistent,” he said. “What we do today may not be the answertomorrow, and we’re not going to be afraid to change if we think itwill keep us viable. We have a commitment to Brookhaven to doeverything we can to keep Columbus Lumber viable.”