Maine’s Forest Products Industry Ready to Reinvent Itself

It’s time for Maine’s forest products industry to reinvent itself. Here’s how.

Posted Jan. 19, 2017, at 8:42 a.m.
Maine’s forest products industry finds itself in an unusual position. Instead of having markets for every part of the tree, we’ve seen a 25 percent reduction in markets because of global economic forces. This has reduced its economic impact by $1 billion, shuttered six mills and cost the state more than 5,000 good jobs.

We’ve also seen an outpouring of support from Maine’s congressional delegation, Gov. Paul LePage and other state leaders. Many have asked how they can help to strengthen this industry, which remains a significant economic driver in Maine. In 2016, it contributed an estimated $8.5 billion to the state’s economy and supported directly and indirectly more than 33,538 jobs, even after recent mill closings, according to a University of Maine study.

So we think it’s important to share the efforts over the last six months of a coalition of leaders from the forest products industry, communities affected by mill closures and education and economic development organizations, known as the Maine Forest Economy Growth Initiative. Its members include the Maine Forest Products Council, the Maine Pulp and Paper Association, Professional Logging Contractors of Maine, Small Woodland Owners of Maine, Biobased Maine, and the University of Maine, led by its Center for Research on Sustainable Forests. The Maine Development Foundation is providing support for our work, including gathering input from affected communities.

Our goal is to attract capital investments, develop greater economic prosperity in the forest products sector statewide and sustain good-paying jobs by developing a common long-term vision for the forest economy and identifying and taking action on key opportunities and challenges that must be overcome.

 Here are several immediate initiatives we believe would help:

— Engage a leading international forestry consulting firm to objectively identify the current and emerging global forest products markets where Maine is likely to be most competitive. We would also include a benchmarking component to compare Maine regionally, nationally and internationally to better understand the market opportunities and challenges.

— Conduct a wood supply analysis to attract new markets. It has been well over a decade since a comprehensive analysis of Maine’s current and future wood supply has been completed. To capture new and future markets for wood products, we need a detailed understanding of the long-term supply.

— Integrate and synthesize results from the wood supply analysis into a comprehensive and achievable vision for Maine’s forest sector. This roadmap should contain clearly defined objectives, tasks and action items, and include a marketing plan that informs potential investors about business resources and manufacturing site options.

Further initiatives include better transportation systems from forests to mills to markets; development of more outlets for forest residuals, including combined heat and power projects; increasing outreach to small-woodland owners; and investing in the commercialization of new products such as bio-based products. For affected communities, priorities include the redevelopment of closed mill sites, and diversifying and strengthening Maine’s rural economy by supporting small businesses, investing in community infrastructure, expanding broadband, and supporting rural tourism development.

As we seek ways to implement these initiatives, we already are moving forward. Maine’s larger mills are diversifying as quickly as our capital-intensive industry allows. Much of the global growth is in tissue. That’s why Woodland Pulp in Baileyville invested $120 million in two tissue machines. Markets for packaging and specialty papers are growing, too, so those products have been added in Madawaska, Skowhegan, Westbrook, Jay and Rumford.

In the solid wood sector, Maine’s sawmills are well capitalized. Irving opened its Ashland mill in 2014. The Huber Resources Corp. and Louisiana-Pacific Corp. panel facilities are hiring more staff to meet demand.

Our biomass energy sector, including wood pellets, has been affected by lower costs for oil and natural gas, reducing that market. Loggers, landowners and sawmills depend on biomass fuel outlets for their sawdust and bark, so they’re working together to revive these important markets.

Thanks to a bill passed in April, biomass generators have transitional help. Last month, Maine regulators approved splitting $13.4 million in temporary subsidies for four biomass facilities, including two shut down in Penobscot and Washington counties. The new owner of those plants, Stored Solar, is now buying wood fuel and expects to reopen both facilities soon.

There clearly are challenges ahead, but we have enormous assets to build on going forward. Developing and pursuing an effective growth plan will require partnerships among federal, state and industry resources. By working together and staying the course, we can sustain and reinvent Maine’s forest products industry and increase its benefits to communities across the state.

Yellow Light Breen is president and CEO of the Maine Development Foundation. Patrick Strauch is the executive director of the Maine Forest Products Council.