Bonners Ferry may buy two L-P sawmills-Leaders explore idea as a way to save jobs, help economy

Shaken by two years of turmoil in the forest products industry, community leaders in Bonners Ferry are exploring the idea of buying two local sawmills and running the mills themselves.

Becky Kramer
Staff writer

The idea took root in April, when a Louisiana-Pacific mill in Bonners Ferry closed indefinitely, costing more than 100 people their jobs. As employees scrambled to find replacement work in this small timber town near the Canadian border, worrisome rumors swirled.

"Rumors abound right now," Bonners Ferry Mayor Darrell Kerby said. "The fear, of course, is that the mill won’t reopen."

News of the closure reached Gary Pruitt, a Seattle executive who grew up in Bonners Ferry. In a phone call to Kerby several weeks ago, Pruitt suggested that the community consider buying the sawmill, as well as a second Louisiana-Pacific mill in Moyie Springs.

"The idea was intriguing enough, and his vision was clear enough, that I felt it would hold real possibilities," Kerby said.

A group of business and civic leaders has formed to study the idea.

"The effort is to see if we can create an alternative business model, where the community would acquire and operate the mills with the intent of creating jobs and stabilizing the economic environment," Pruitt said.

Louisiana-Pacific is Boundary County’s largest industrial employer, with more than 300 workers at the two sawmills. Portland-based L-P tried to exit the lumber business last year by selling off 12 mills in the United States and Canada. However, most of the mills — including the two in Boundary County — came off the market when no suitable offers were received.

"In the lumber business, we continue to see an oversupply situation, with historic low prices," L-P spokesman David Dugan said. "We’d certainly speak to interested parties. We’re keeping our options open."

Kerby said the committee has had limited contact with Louisiana-Pacific officials to date. Committee members’ first priority is to take a close look at the mills’ financial situation. Then they’ll know whether to proceed to more difficult questions, such as where the money to purchase the mills would come from.

"L-P is probably making the right decision for its shareholders," Pruitt said. "But the community must also assess what their opportunities are within the resources they have."

Pruitt is the chief executive officer of Univar USA Inc., a chemical distribution company with annual sales exceeding $2 billion. He has an extensive financial background, that includes due diligence on companies slated for acquisition.

"His career has taken him around the world," Kerby said of Pruitt. "He’s bringing credibility, if you will, to the concept."

Pruitt said the sawmills might be profitable under a different tax structure. He envisions a nonprofit type of situation, where proceeds would support economic development in Boundary County, schools and other civic causes.

But the committee doesn’t want to raise false hopes in the community, either, Pruitt said.

"We’re in the initial phases of evaluation and discussion," he said. "If it doesn’t work, we don’t want people to have made life changes" based on the expectation of new jobs.

Paul Ehinger, a forestry consultant in Eugene, Ore., said he’s not aware of another community that has successfully acquired and operated mills. Workers in Omak, Wash., bought a plywood plant, but it later filed for bankruptcy. In Libby, Mont., a community effort is under way to purchase a plywood plant that closed last year, and open it on a smaller scale.

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