Roseburg lumber company will cut 450 jobs, output

Roseburg Forest Products announced Tuesday that it will scale back its plywood production and slash 450 jobs, or about 12 percent of its work force, because of stiff competition and a feeble U.S. economy.

BOAZ HERZOG Oregonlive.com

"This is a company in transition," said Allyn Ford, president of the Roseburg-based company, which has operations in Oregon, California and Montana.

Most of the layoffs will occur at Roseburg’s softwood plywood plant in Dillard, just southwest of Roseburg. Plywood, which accounts for half of the company’s sales, has lost much of its value as an important commodity in recent years. Cheaper competitors have destroyed a large chunk of its market share.

Many home builders say that oriented-strand board, flakes of wood glued together, performs just as well as plywood, sheets of veneer bonded together. And strand board costs about 50 percent less, said Shawn Church, editor of Random Lengths, a Eugene-based wood-products trade publication.

In addition, since the late 1990s, Roseburg and other plywood-makers have lost sales and seen prices drop because of increased imports from Canada and South America, Church said.

"It’s been an evolving trend," he said. Plywood’s descent probably will continue, but its pace will slow "because a lot of the fallout has already occurred."

The nation’s sluggish economy also has hampered Roseburg’s business, particularly sales of its high-end hardwood plywood.

"It’s been very slow," Ford said.

Softwood is used for products such as structural-grade plywood sheathings on house walls and rooftops, while more durable hardwood is used for specialty plywoods such as those in cabinet making.

Because of the delay in the economic recovery, he said, "we felt it was necessary to take this step."

Laid-off workers were notified Tuesday and will lose their jobs during the next two weeks, Ford said. At the same time, Roseburg will reduce its plywood production by about 20 percent.

Despite the cutbacks, the privately held company will see a "small increase" in sales this year, Ford said. The company’s sales have grown about 5 percent to 10 percent annually in the past five years, he said.

Roseburg will make up for lost plywood sales with gains in lumber and engineered wood products used in residential construction, he said. For example, the company plans to increase capacity at its Dillard stud mill, separate from the plywood mill, by 70 percent by the end of the year. And earlier this year, Roseburg bought a 200-employee particle-board mill in Missoula, Mont., from Louisiana-Pacific, for $20 million.

Roseburg Forest Products is the largest employer in Douglas County, with about 3,700 workers. The layoffs will be a significant hit to the struggling county, which posted 10 percent unemployment in February.

Boaz Herzog: 503-412-7072, [email protected].

http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/10492882413410.xml