Forest Industry Set to Add Growth Ring

Article excerpt

THE United States paper and forest-products industry appears on the verge of a recovery, thanks to slowly growing demand and a reduction in planned future capacity.

"While the wood products industry will remain a cyclical one, we strongly believe that for the first time in 15 years the industry will enjoy substantial benefits from the coming improvement in wood product demand," notes a Prudential Securities analysis.

But many of the people who work in the mills and factories remain skeptical.

"We keep hearing about the end of the recession and the upturn in our industry, but we sure haven't seen it yet. Orders are very slow," says Curt Copenhagen, a spokesman for Longview Fibre Company in Longview, Wash., several hours' drive south of here. Longview Fibre shut down its pulp and paper operations for a week recently, sending many of its 2,000 local employees home.

Nor was it the only Northwest company to do so. Weyerhaeuser Company announced it was going to briefly close a pulp mill in Everett, Wash., as well as extend a maintenance shutdown at a Canadian pulp mill for a few more days. Weyerhaeuser notes that demand for wood pulp is up slightly over last year, but price-cutting has meant thin profit margins for producers.

The timber and forest-products industry has been hit especially hard in the Pacific Northwest in recent years, because of weak demand, the extensive exporting of logs - which has meant lower production in US pulp and paper mills. Thousands of jobs have disappeared, some because of automation.

Plans to limit logging on millions of acres of federal forest lands to protect the northern spotted owl will mean another diminution in forest-related jobs.

Press accounts continue to report unhappy stories about an industry that has been mired in deep trouble.

Nonetheless, a growing number of experts maintain the industry is coming out of its doldrums. One new analysis, by IDS Advisory Group Inc., concludes that North America remains the world's "low-cost producer" of paper, lumber, and plywood. …