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Rare interview offers insight into Irving, Maine’s largest landowner

Posted Feb. 07, 2014, at 11:14 a.m.
Last modified Feb. 07, 2014, at 5:24 p.m.

FORT KENT, Maine — When Maine’s largest landowner decides to implement new forestry practices on its timberland, it’s bound to attract some interest.

So when J.D. Irving Ltd., in a move made public last fall, signed a five-year agreement with the Maine Forest Service in 2012 to enter the company’s 1.2 million acres into a little-known, 12-year-old state program called Outcomes Based Forestry, it got noticed.

Under the program, Irving was exempted from certain sections of the state’s Forest Practices Act that cover clear-cutting in return for meeting other environmental and economic standards.

When Irving’s participation in the program became public in November, it provoked an outcry from some lawmakers and Maine’s environmental advocates, who called it a “loophole” that put Maine’s forest at greater risk for dangerous clear-cutting.

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It also thrust J.D. Irving Ltd., and by extension the Irving companies that operate in Maine, into an uncomfortable spotlight. Although Irving is one of the most visible and recognizable names in Maine, the Irving companies are fiercely private and work to keep it that way.

From timber to rails, agriculture to trucking and fuel oil to convenience stores, it’s hard to turn around and not see evidence of at least one component of what are collectively referred to as the “Irving family group of businesses.”

And behind every sign, every truckload of timber or fuel delivery truck in Maine is a member of the New Brunswick-based Irving family at the helm of what have become two distinct corporations sharing the family name.

In addition to owning 1.2 million acres of timberland, J.D. Irving Ltd. also operates mills, farms and railway around Maine. James D. Irving and his brother Robert co-chair J.D. Irving Ltd.

Robert Irving manages that company’s Saint John-based tissue-making plant, along with Prince Edward Island-based Cavendish Farms, which has expanded into Maine with between 7,000 and 8,000 northern Maine acres primarily used in potato production. Cavendish Agri Services, with operations in Presque Isle, specializes in fertilizer production.

James D. Irving oversees all the forestry and railroad interests in both Maine and New Brunswick. In December, he agreed to a rare public interview with the Bangor Daily News to talk about his company, its Maine holdings and his view of Outcomes Based Forestry.

As a company, J.D. Irving Ltd. has embraced evolving forest harvest technology and those changes have greatly altered how it manages its woodlots and lands in Maine.

“[Outcomes Based Forestry] is holding us accountable and that is fair if you are a serious landowner,” Irving told the BDN. “This is not about Irving running wild and cutting all we want.”

Rather, Irving said, the outcomes process will give his company the flexibility it needs to do what his foresters believe is best for the long-term health of both the woodlands and the company.

Some feel Irving, however, doesn’t have the forest’s best interests in mind.

“Irving’s 1.2 million acres in Maine create an enormous footprint here, so their intentions for their land matter to all of us,” said Lisa Pohlmann, executive director of the Natural Resources Council of Maine. “The company has appeared determined to bend and change Maine’s laws and rules to its advantage, often at the expense of Maine’s environment.”

Irving does not agree.

“I don’t quite understand this ‘loophole’ business,” Irving said. He pointed out that under Outcomes Based Forestry, all non-clearcut harvests are regulated and Irving must demonstrate soils protection, conservation of biological diversity, overall forest health, local economic support and sustainable forestry.

What it does allow the company to do, he said is “improve our efficiencies and do a better job.”

He said that in the company’s first year under Outcomes Based Forestry, clear-cutting on Irving land decreased from the previous year and only accounted for 15 percent of the total harvest. But he doesn’t expect this to silence the company’s critics.

“You get reactions sometimes from people and [some] that does not favor us,” Irving said. “But we need to be doing a good job in the woods.”

Irving is also well aware his company has a reputation for so-called “cut and run” practices in the northern Maine woods, a reputation he says is false.

“When you spend $3 million to $4 million a year to plant trees you make sure it will generate a good forest ecosystem,” he said. “We want to leave a good legacy.”

Family business

The Irving legacy in Maine today is being written by two separate companies whose operations are similar in name and lineage only.

On the forest products side, J.D. Irving Ltd. employs 375 people in Maine with an annual payroll of $18.5 million.

A second branch of the family, headed up by James’ and Robert’s uncle, Arthur Irving, operates Irving Oil, also based out of Saint John, N.B. Irving Oil officials declined to comment for this story.

According to its website, Irving Oil operates 900 fuel distribution centers and gas stations around New England and eastern Canada, 165 of those in Maine.

“Irving Oil is a big player in Maine,” Jamie Py, president of the Maine Energy Marketers Association, told the BDN. “They are a member of our association as a wholesaler in heating oil, gas, diesel and propane and at the retail level for heating oil and propane.”

While Py said he did not have any exact figures on the amount of petroleum products Irving brings into Maine, he did say it was “a lot.”

The largest seller of gasoline in the state, Irving Oil sold about 14.4 million gallons of gasoline in Maine in October 2013, the most recent month for which sales tax revenue is available, according to Maine Revenue Services. The company also operates or has marketing rights at fuel terminals in Searsport, South Portland and Bangor.

“Any Mainer realizes [Irving] is a significant distributor of [petroleum] products in Maine,” Patrick Woodcock, director of the governor’s energy office, said. “Another level is the presence of the refinery in Saint John [New Brunswick] which drives significant regional energy transportation.”

The size, scope and strategy of the Irving family has had a lasting effect on New Brunswick, dominating that province’s economy, according to Forbes magazine, with its group of companies owning interests in oil, natural gas, gas stations, timber, paper products, shipbuilding, construction, agriculture, building supplies, newspapers, radio stations and even a minor league hockey team.

While James D. Irving wouldn’t discuss family or company finances, Forbes magazine in 2013 ranked his father James K. and uncle Arthur together — as the heads of the family’s businesses — at number 276 on its list of the world’s richest men, with a net worth of $4.5 billion.

“The Irvings have been important [to New Brunswick] for 100 years,” according to Donald Savoie, public policy and economic development professor at the University of Moncton and longtime friend of Irving Oil patriarch Arthur Irving.

Savoie credits Kenneth Colin Irving, the son of company founder James Dergavel Irving, for laying the foundation for the Irving companies today.

“It was K.C. Irving who first gave life to the company — pulp, paper, shipping, gas and oil — they have a hand in virtually every sector of the [New Brunswick] economy,” said Savoie.

And it was K.C. Irving who, in the 1940s, expanded his company into Maine with purchases of timberland to feed his pulp mill downriver in Saint John, N.B.

“As far as we are concerned, Maine is our home,” James D. Irving, K.C. Irving’s grandson, said. “We have a long association with northern Maine and I have spent a good part of my career there.”

‘Absolute geniuses’

Even within J.D. Irving Ltd., the forestland, railway and agricultural interests are all run as separate businesses — Irving Woodlands, for instance, is the company controlling the forestry division — but that does not mean they are distinct from each other.

“There is a certain vertical integration that does occur,” said Mary Keith, J.D. Irving’s vice president of communications. “And the good news about that is it generates and continues to grow jobs in the region.”

For example, Keith said worldwide fluctuations within the pulp industry are mitigated within Irving’s operations by ensuring a constant supply from the Maine and New Brunswick timberlands and a steady customer in the Irving-owned tissue mill.

“For us, our pulp mill in Saint John has an anchor customer with Irving Tissue up the road,” she said. “So we are not as subject to the volatile swings in the market.”

To transport its goods, the company also operates 549 miles of track in Maine and New Brunswick split among Eastern Maine Railway, Maine Northern Railway and New Brunswick Southern Railway.

This integration has become a model of study for a generation of New Brunswick business students, like Deborah Armstrong. Now a human resources specialist in Saint John, Armstrong studied the family as she pursued her undergraduate business degree in the late 1970s.

“They are absolute geniuses at business integration,” Armstrong said. “Nobody does it better.”

And few family businesses protect their privacy better, she said.

Despite this reputation, James Irving welcomes scrutiny of his company’s 65-year history in Maine, and defies anyone to find its harvesting methods are anything other than sustainable and good for the long-term.

“We understand the northern Maine region,” Irving said. “We know if you are going to be in the timber business, northern Maine is the place to be [and] we grow good timber.”

Next generation

The company’s growth in Maine is poised to continue as well, as the next generation of Irvings start work.

James D. Irving’s youngest son, Alex, 24, is currently working with his father to learn the company’s forestry operations, according to Keith.

Irving also is investing $30 million into its revitalized Ashland sawmill, which should create 60 permanent jobs when it re-starts next summer. Irving had previously closed the sawmill on the same site in 2008.

While some of the timber for the Ashland mill will come from Irving-owned land, much of it also will be purchased from other Maine timberland owners.

And several years ago, James Irving began exploring the possibility of mining his holdings on and around Bald Mountain, northwest of Ashland, for gold, silver, copper and zinc.

This year, the Legislature will consider new state mining regulations that would allow Irving to mine the 500-acre site in Aroostook.

Irving estimates the mining would create up to 300 direct jobs and hundreds of other indirect jobs, while providing more than $120 million in state and local taxes. He is also adamant the project will only go forward when and if it is proven to be environmentally sound.

Much like with forestry, this claim draws skepticism from Maine’s environmental community, who accuse the company of extolling sustainability in a quest for profit.

“In our view, Irving appears overly focused on corporate profits that can be made from the natural resources they now own in Maine, rather than a sustainable balance of conservation and economic development,” said Pohlmann of the NRCM.

James Irving admits he is a businessman in an industry that must remain competitive in a global market.

He insists, however, that good business and sustainable practices — such as those of Outcomes Based Forestry — do not come at a cost to the Maine environment.

“We are here for the long term,” he said. “We know we have a lot of critics and people who criticize what we do, but if someone is better informed on what we do, they can see we are interested in the long-term health of the forest and of the state.”

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