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The forest products industry has had a successful run over the past few years but an expected downturn is coming, said Allyn Ford, president of Roseburg Forest Products.
Speaking at the Roseburg Area Chamber of Commerce's noon luncheon on Monday, Ford said an expected rise in interest rates and inflation, due to energy prices -- with an eventual burst of the housing bubble -- will cause forest products prices to drop.
But the industry itself isn't going to collapse.
"Looking on past cycles, this looks pretty good," Ford said.
Ford's address on the future of the industry was his third on the subject in as many years. It came at the chamber's last forum of the season. The series resumes Sept. 11.
Ford said the industry has been changing since it experienced a sharp downturn in harvest after the listing of the northern spotted owl as a threatened species and passage of the Northwest Forest Plan.
The plan was a timber initiative drafted by the Clinton administration that was supposed to maintain high levels of timber harvests in accordance with environmental laws already in place.
Instead, the plan resulted in a glut of lawsuits that claimed timber sales were in violation of rules such as the Endangered Species Act and the National Environmental Policy Act.
While the lawsuits held up production, the forest products industry in the Northwest lost about 40 percent of its supply and 30 percent employment, Ford said.
Today, the forest products industry makes up 9 percent of Oregon's employment, while making up about 25 percent of Douglas County's employment, Ford said.
Yet, Ford said those numbers will change as the industry continues becoming more dynamic and switches to technological machinery and workers who can operate it.
"We're seeing a tremendous impact" from technology, Ford said.
Earlier this month, RFP's plant in Coquille cut 17 jobs because of new automation and announced it expects to have 25 to 35 more layoffs within the next year.
Ford said employee cutbacks result from technological advances and are not isolated only to the Coquille plant. RFP is asking its employees to learn many skilled positions and take on more responsibility, in an effort to eliminate supervision.
"We have to invest in training and skills," Ford said.
Ford said one major concern of the industry is a continuous supply of timber in the future. Douglas County imports nearly 40 percent of its timber.
Yet a "revolution" of new mill construction in Washington to harness its own second-growth timber could hurt Douglas County's imports by as much as 10 percent.
Ford said that as long as there are trains loaded with timber causing traffic jams in Roseburg, "you're going to have a good economy."
Only a higher allowance of timber harvests on federal lands in Douglas County will curtail a dependence on imports, Ford said.
"We'll have some tough times to go through but I think we're ready for it," Ford said.
Chris Clark, a commercial loan manager with PremierWest Bank, asked Ford if industrial and commercial developments in China will draw away timber imports in the future.
Ford said that as the world market standardizes, there is more of a demand for finished products such as plywood, rather than for raw products such as timber logs.
However, China is getting its plywood from somewhere and it's not United States suppliers.
"China is a dilemma for us," Ford said.
* You can reach reporter Adam Pearson at 957-4213 or by e-mail at apearson@newsreview.info.
Speaking at the Roseburg Area Chamber of Commerce's noon luncheon on Monday, Ford said an expected rise in interest rates and inflation, due to energy prices -- with an eventual burst of the housing bubble -- will cause forest products prices to drop.
But the industry itself isn't going to collapse.
"Looking on past cycles, this looks pretty good," Ford said.
Ford's address on the future of the industry was his third on the subject in as many years. It came at the chamber's last forum of the season. The series resumes Sept. 11.
Ford said the industry has been changing since it experienced a sharp downturn in harvest after the listing of the northern spotted owl as a threatened species and passage of the Northwest Forest Plan.
The plan was a timber initiative drafted by the Clinton administration that was supposed to maintain high levels of timber harvests in accordance with environmental laws already in place.
Instead, the plan resulted in a glut of lawsuits that claimed timber sales were in violation of rules such as the Endangered Species Act and the National Environmental Policy Act.
While the lawsuits held up production, the forest products industry in the Northwest lost about 40 percent of its supply and 30 percent employment, Ford said.
Today, the forest products industry makes up 9 percent of Oregon's employment, while making up about 25 percent of Douglas County's employment, Ford said.
Yet, Ford said those numbers will change as the industry continues becoming more dynamic and switches to technological machinery and workers who can operate it.
"We're seeing a tremendous impact" from technology, Ford said.
Earlier this month, RFP's plant in Coquille cut 17 jobs because of new automation and announced it expects to have 25 to 35 more layoffs within the next year.
Ford said employee cutbacks result from technological advances and are not isolated only to the Coquille plant. RFP is asking its employees to learn many skilled positions and take on more responsibility, in an effort to eliminate supervision.
"We have to invest in training and skills," Ford said.
Ford said one major concern of the industry is a continuous supply of timber in the future. Douglas County imports nearly 40 percent of its timber.
Yet a "revolution" of new mill construction in Washington to harness its own second-growth timber could hurt Douglas County's imports by as much as 10 percent.
Ford said that as long as there are trains loaded with timber causing traffic jams in Roseburg, "you're going to have a good economy."
Only a higher allowance of timber harvests on federal lands in Douglas County will curtail a dependence on imports, Ford said.
"We'll have some tough times to go through but I think we're ready for it," Ford said.
Chris Clark, a commercial loan manager with PremierWest Bank, asked Ford if industrial and commercial developments in China will draw away timber imports in the future.
Ford said that as the world market standardizes, there is more of a demand for finished products such as plywood, rather than for raw products such as timber logs.
However, China is getting its plywood from somewhere and it's not United States suppliers.
"China is a dilemma for us," Ford said.
* You can reach reporter Adam Pearson at 957-4213 or by e-mail at apearson@newsreview.info.
