By Kathy McCarty
Staff Writer
ASHLAND, Maine — Katahdin Forest Products, parent company of Katahdin Cedar Log Homes, based in Oakfield, announced Thursday it has completed the purchase of SWP Industries’ Ashland saw mill for an undisclosed amount.
At a time when other mills in the area have been forced by the state of the economy to reduce work schedules or shut down operation indefinitely, word of the purchase was met with enthusiasm.
“This is great news. I knew it was going through but couldn’t say anything until the company made the announcement,” said Town Manager Jim Gardner.
Gardner said his community has seen its share of hard times in recent weeks and that Katahdin’s decision to re-open is welcome news.
“It’s nice to see Katahdin Forest Products come in here. They’re a very well-respected company in the cedar industry. Those jobs will cycle down to other aspects in the community. Employees will buy gas, groceries here. When you can get a company to come in such as Katahdin and put its roots down here, that’s great news,” said Gardner.
The mill is configured to saw northern white cedar for log homes and Katahdin’s cedar fencing business.
According to David Gordon, president of Katahdin, the acquisition will nearly double the amount of rough lumber the company will be able to produce in-house.
“This mill really allows us to maintain control over our raw commodity expenses, as we will cut in half our need to outsource sawn lumber product,” said Gordon. “This purchase really comes at an ideal time for us, allowing Katahdin to meet increased demand for its products.”
Unlike other log-home manufactures and designers who’ve been hit hard by the national housing recession, Gordon’s company is actually doing quite well.
“In these difficult economic times, we’re very pleased to be able to re-open the Ashland mill and add 10 to 12 good jobs to the area,” Gordon said.
The mill currently has two employees on staff handling orders and will resume production in April 2009.
Gordon said the Ashland facility is in a perfect location when it comes to acquiring raw lumber for the business at an affordable price.
“The Ashland location is ideal for keeping our overhead low on sawn cedar because of its proximity to private lumber roads and cedar forests,” he said. “A single log truck is limited to about 13 cords of round logs on state and federal highways, but private roads allow for about 45 cords of round wood on a single truck. This provides a significant savings of about 50 percent on forest-to-mill trucking costs, which will allow us to maintain competitive pricing on all our products.”
Gordon reports the company is financially sound, despite current conditions in the housing market. He says sales are ahead of last year and anticipates they will remain good in the coming year.
Barry Ivey, the company’s vice president of log home operations, indicated one reason is that Katahdin Cedar works with home buyers who’ve made and lost deposits to bankrupt log home manufacturers.
The company was able to reduce expenses this winter and save about $400,000 by converting its oil-burning heat and wood kiln systems to wood waste, according to Gordon. The new facility in Ashland will also cut the company’s need to outsource its mill work.
Katahdin provides finished materials, consisting of mostly cedar planks and finished logs, to about 180 homes annually for construction companies to build, Gordon said. Home prices range from $18,000 for a camp to one of its latest projects, an 18,000-square-foot restaurant that Kentucky country music star Eddie Montgomery is building at an estimated cost of $850,000.
Ivey said the company sells nationally and has helped construct homes in Canada and as far away as Israel and France.
In addition to homes, the company produces cedar fencing, lawn and garden furniture, as well as parts for wood playground equipment, according to Gordon.
Gordon indicated Katahdin Cedar saw a boost in business, thanks to the television show “Extreme Makeover: Home Edition.” About three years ago the company constructed a home in Wells for a family from Maine who’d won a makeover on the program. Since then, Gordon said sales have been increasing.
Ivey said the addition of the Ashland facility will have other direct benefits. “The Ashland mill location will triple Katahdin’s access to FSC Certified Northern White Cedar grown in responsibly-managed forests,” said Ivey. “In meeting current and future demand for environmentally-friendly or ‘green’ homes, this acquisition will further position Katahdin to respond to expanding market share.”
The expansion will enable Katahdin’s fencing division to increase production by 25-40 percent and take advantage of recent upgrades in the processing in the picket mill.
“We’ve just upgraded our variable-speed drives to provide a finer finish to the pickets and support boards at a faster rate,” said Brian Holyoke, vice president of Katahdin’s fencing division.
Gardner said the community’s strong work ethic plays a big role in attracting business to the area. Having dependable employees, according to Gardner, creates a strong foundation for establishing any business. Gardner said Katahdin will have many qualified applicants to pick from when filling the new positions.
“We’re (the town) elated to see Katahdin Cedar come to Ashland. This is great news,” said Gardner.
SWP Industries is based in St. Stephen, New Brunswick, Canada, and currently has one other mill operational in Maine. The company markets fencing products to wholesale customers. For more information, visit www.katahdincedarloghomes.com.
