ASHLAND, Maine — Katahdin Forest Products, the Oakfield-based maker of cedar log homes, is considering expanding its sawmill in Ashland, at the same time that the North American lumber dispute 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, said David Gordon, the company’s president.
The potential expansion would rely on electricity purchased direct 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 since has invested around $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 locate another 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, along with Moosewood Millworks, EcoShel, Northeast Pellets, ReEnergy and the two large lumber mills, Maibec and JD Irving. If the potential expansion goes forward, employment at Katahdin’ Ashland mill could grow to 30-35 workers, Gordon said.
Buying electricity direct from ReEnergy’s Ashland biomass plant is an idea that’s been “discussed in the past and resurrected,” and ReEnergy has a similar arrangement with a mill in Stratton, Maine, Gordon said. The company leader is in the midst 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 both 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 to countervailing duties.”
Countervailing duties, in the form of tariffs on imported wood products 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 duties on Canadian lumber, following the end of a nine-year agreement that allowed tariff-free lumber sales 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 could affect a range of the wood products companies in northern Maine, and in different and complicated ways. Two of the region’s largest sawmills, Maibec in Masardis and JD Irving in Nashville Plantation, are both owned by Canadian parent companies, while JD Irving is also 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, and on the other hand, it could also raise costs for U.S. companies in northern border states who buy some wood supply from Canada.
Gordon estimated that Katahdin Forest Products purchases about 6-7 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,” he said.
