Katahdin Forest Products, the Oakfield-based maker of cedar log homes, is considering expanding its sawmill in Ashland at the same time that a lumber dispute between the U.S. and Canada leaves a cloud of uncertainty over the market.
Amid ongoing growth in sales of log homes and fences, Katahdin Forest Products is looking at the possibility of “a significant expansion” at its Ashland mill, according to David Gordon, the company’s president.
The potential expansion would rely on electricity purchased directly from the nearby ReEnergy biomass power plant at favorable rates and could roughly triple the mill’s employment, Gordon said.
Katahdin Forest Products, best known for its cedar log homes, purchased and restarted a softwood sawmill in Ashland in 2009 and has since invested about $200,000 and brought the number of workers to 11, Gordon said. The company has long had two sawmills in Oakfield, near major stands of cedar in southern Aroostook County, and decided to buy the Ashland mill close to cedar stands in the North Maine Woods, Gordon said.
The company’s cedar sawmill is now one of 11 forest product companies in greater Ashland, including Moosewood Millworks, EcoShel, Northeast Pellets, ReEnergy and the two large lumber mills, Maibec and JD Irving. If the potential expansion goes forward, employment at the Ashland mill could grow to 30 to 35 workers, Gordon said.
Buying electricity direct from ReEnergy’s Ashland plant is an idea that has been “discussed in the past and resurrected,” he said. ReEnergy has a similar arrangement with a mill in Stratton. Gordon said he is in the midst of getting final information about the potential arrangement and has spoken about the possibility of an expansion with the town of Ashland.
Katahdin Forest Products was founded in 1973 by Gordon’s father and two other business partners and has been selling craft cedar log homes to customers around the world ever since. With 80 employees in total, the company also makes cedar fences and other products sold online and from a factory store in Oakfield.
The company’s log home sales “have been going up significantly over the last three years,” with current orders from Scotland, China and Australia, and “fencing is almost as big as our log homes,” Gordon said. “We’re the largest cedar fence manufacturer in the United States.”
The fence and log home businesses “give us the ability to utilize the whole tree,” he said.
Gordon said he’s optimistic about the markets for cedar homes and fences. “There’s a shortage of homes in the United States. The market is going to stay strong for the next two or three years and fencing is same. The big question is what happens with countervailing duties.”
Countervailing duties, in the form of tariffs on imported wood products from Canada, are one possible outcome of the latest round in the North American lumber dispute.
In late November, the U.S. Lumber Coalition asked the U.S. International Trade Commission to impose stiff tariffs on Canadian lumber, following the end of a nine-year tariff and quota agreement between the two countries. The American lumber industry charges that the Canadian government unfairly subsidizes Canadian lumber companies with access to vast tracts of government-owned forestland that allows cheap Canadian lumber to outcompete regional U.S. producers in U.S. markets.
The dispute and its resolution could affect a range of wood products companies in northern Maine in different and complicated ways. Two of the region’s largest sawmills, Maibec in Masardis and JD Irving in Nashville Plantation, are owned by Canadian parent companies, while JD Irving also is Maine’s largest landowner.
For Katahdin Forestry Products, Gordon said the impact of changes to the lumber market could be subtle or significant. “It could be a double-edged sword,” he said. “It’s hard to know if it would be a net minus or net positive.”
On one hand, higher cost Canadian lumber could boost sales and prices for U.S. lumber producers. On the other hand, it could also raise costs for U.S. companies along the northern border states that buy some wood from Canada.
Gordon estimated that Katahdin Forest Products buys about 6 to 7 percent of its sawn cedar lumber from mills in New Brunswick and Quebec to keep up with the company’s growing demand. “I’m buying all the cedar that I can in Maine now.”