Crown Capital Eco Management Jakarta Reviews: Millinocket co. unearths logging history for niche market - 3 views
started by Allison Bailey on 16 May 13
started by Allison Bailey on 16 May 13
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But Tom Shafer is harvesting that wood for a new purpose. And it's given him a new purpose, too.
For two decades, Shafer chased down daily profits as a market maker on the floor of the New York Stock Exchange. Now, instead of quick returns, he and Steve Sanders, co-founders of Maine Heritage Timber Co., plan to cash in on an investment that's taken centuries to mature: the market value of unique wood locked in logs stacked deep in the silty bottom of that 1,000-acre lake in Millinocket.
Shafer says between 700,000 to 1 million cords of wood - enough to harvest for around 20 years - is estimated to have sunk into the lake during log drives to Great Northern Paper's nearby mill. For the past two years, Maine Heritage Timber has been reclaiming the mostly century-old wood. In the first year, most of the logs were turned into pulp to feed biomass boilers. But in the last year, Shafer has been seeking a niche market that promises a much greater return for the wood - high-end flooring.
"Last year, we did about 90% biomass and pulp and 10% flooring and furniture. This year, I hope that it's 80% flooring and furniture and 20% biomass," Shafer says. "The only thing that I want to [sell for] biomass is the stuff that I can't saw."
Shifting gears
The journey from pulp to upscale floor planks was a surprise to Shafer. Until late 2012, he and Sanders saw the sunken forest on the lake's bottom much the way the loggers who cut it a century ago had likely seen it: a source to make paper.
Sanders had worked with the original Great Northern Paper Co. , which filed for bankruptcy in 2002, to assess the quantity of sunken logs in Quakish Lake. Although the mill abandoned its reclamation projects and Sanders eventually became a builder in the Portland area, he returned in 2010 to negotiate permission to harvest the sunken wood. With Shafer's prowess for finding investment capital and Sanders' working knowledge of harvesting wood, the two started their own company.
In 2010, "we thought we were going to take this wood out [of the lake] and deliver it in full containers to the mill," Shafer says. "They were going to process the wood and we were going to sell it for pulp."
Then, in early 2011, the East Millinocket pulp mill shut its doors. That unexpected turn pushed Maine Heritage Timber to change direction and buy its own sawmill to mill wood for value-added products, like flooring and custom furniture.
It's taken over a year to pivot the business, says Shafer, to perfect processes for cleaning the wood and finding manufacturers to help with production. To shore up the financing, Shafer found another investor - whom he declined to name - to join him and Sanders. That tight-knit financing structure has been key in allowing the company to transform, Shafer says.
If they had any more investors, Shafer says, "we'd be out of business because our business model has changed so drastically."
Last October, the company expanded its operation on the Golden Road to include an office building next to its milling and maintenance buildings - all leased from Pittsfield-based Cianbro Corp. Two seasoned woodworkers now make cuts of sample wood and custom products for clients and trade shows in the former office building.
Last year, the company spent about $1.2 million in operating expenses and recorded about $600,000 in revenue. The owners are banking on the success of the high-end flooring line to really vault the company into profitability.
Three products comprise the line: the spruce and fir Riverdriver Collection; the yellow birch and red oak 1899 Collection; and the eastern white pine Penobscot Collection. They are all "engineered flooring," where a wear layer of quarter-inch reclaimed wood is hot-glued to a half-inch layer of 11-ply Baltic birch. They sell for $9.50 to $13 per square foot, unfinished.
That type of construction allows the company to multiply, for example, the 13,000 dried board-feet unloaded at its Golden Road warehouse in mid-April into about 39,000 feet of flooring. The engineered construction technique enhances the final product, according to Robert Rice, a University of Maine wood scientist who worked with Shafer to develop Maine Heritage's products.
"It makes the flooring system stronger and more capable of withstanding shock," Rice says.
Shafer plans to harvest 12,000 tons of logs from the lake this year - less than half of what was pulled from Quakish in 2012 - to keep the saws running year round.
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