Eight years ago, Hampton Lumber purchased a mill along the Skipanon River employing nearly 100 people from fellow wood products company Weyerhaeuser. Hampton invested an estimated $18 million renovating the mill and now directly employs about 150 people there turning out up to 200 million board feet of Douglas fir and hemlock lumber.
Steve Zika, the CEO of Hampton Lumber since 2006, recently met with The Daily Astorian and detailed the company’s local presence.
The third-generation family-owned company has been in business 75 years, since founder Bud Hampton bought his first mill in Willamina. The company now operates four mills in Oregon, three in Washington state and two in British Columbia. It also owns a 34,000-acre tree farm in eastern Clatsop County, around 12,000 acres in western Washington County and around 12,000 acres in Washington’s Pacific County.
The U.S. International Trade Commission recently upheld tariffs of more than 20 percent on lumber imports from Canada, ruling the neighbor to the north subsidizes and dumps timber on the American market. Overseeing mills on both sides of the border, Zika provided his take on the issue of Canadian subsidies and tariffs.
Q: How did Hampton Lumber end up in Warrenton?
A: During the Great Recession, Weyerhaeuser was looking to sell that facility, and since we were already in the Oregon, North Coast area, we felt good about the potential for that mill. It had been somewhat run-down, because they knew they were going to sell it, so they hadn’t been investing in it. So we not only bought the mill, but at the time invested roughly $18 million to update the mill.
Q: What’s the biggest factor affecting Hampton’s business?
A: Timber supply is always going to be the No. 1 factor, because we have the federal forests locked up, and because of the large volume of log exports — I call them raw log exports — to Asia. The timber price, the log price, is the highest here in all of North America, and logs tend to be about 70 percent of your cost of making lumber. So when your cost is really high, you’ve got to be really efficient at the processing and the rest of the costs that go into the product.
Q: What impact have Canadian softwood lumber imports had on U.S. firms?
A: It’s somewhat of an argumentative issue in terms of how much Canadian lumber affects the price of lumber in the U.S. The U.S. coalition says that the lumber producers up there are subsidized with cheap logs. I don’t believe that’s the case. The log price in the U.S. South is way below what the log price is in British Columbia, but the Canadians do benefit from a cheap currency. Their currency is related to oil prices. That’s a big part of their economy. So as the currency got cheap, that makes them more competitive in making lumber.
Q: What’s your take on the recent tariffs imposed on Canadian lumber imports to the U.S.?
A: What our company would like to see is both sides sit down and negotiate a settlement that’s fair to both sides. One of the things that I participate in is called the Softwood Lumber Board. That’s made up of U.S. companies and Canadian companies that sell into the U.S. market, and we’ve been investing in trying to look for new uses of wood, things like cross-laminated timbers, tall wood buildings, comes out of some of the work the Softwood Lumber Board is doing. So I would like to see us continue to grow the pie, so to speak, so there’s more wood use, as opposed to fighting against each other with these duties.
Q: How has automation affected employment at the mills?
A: First of all, you have the optimization, looking at each log to make the maximum value out of every single log, because the logs are expensive, so you’re trying to find the best solution for how to cut that log into lumber. The second part is the machines, since they talk to each other now, hand off the lumber from one machine to another. So what you have is these control systems that are really the automation.
What we’re trying to do, also, is automate some of the jobs that maybe we have trouble recruiting for, like cleaning up the mill. It’s tough to talk young people into coming and shoveling sawdust like they did in the old days.
Q: Do you see any new opportunities for diversification and creating new lumber demand?
A: I think there’s a bright future. Part of it can be restricted if we’re going to restrict the amount of trees that can be harvested. Instead of harvesting 2 percent of the federal growth, if we harvested 10 percent and thinned the forest so we had healthy forests, I think that would create a wood source that would allow us to not only make more lumber or plywood, but then maybe set us up for cross-laminated timbers and some of these other value-added products. I think people are getting more creative on how to use wood beyond just basic lumber.