Hoquiam Plywood deal closes

The California-based company acquiring the Hoquiam Plywood Company made it official Friday.

Pacific States Industries of San Jose, Calif., issued a statement that it had fully acquired the former worker-owned facility “recognized for its premium plywood sheathing.”

Operations, the statement said, will be directed by Pacific States Plywood, headquartered in Springfield, Ore.

“For more than 50 years, Hoquiam Plywood has been recognized as a provider of quality plywood products and veneers,” said Sean Burch, Pacific States general manager. “This acquisition supports our planned growth in the Pacific Northwest and enables us to better serve market demand across the United States and Canada with additional volumes of our high-quality products.”

The deal for an undisclosed amount with Pacific States means the mill is no longer operated under worker ownership. Under the former structure, there were 100 shareholders.

The Hoquiam mill has closed and restarted multiple times in recent years while operators struggled with depressed housing and construction markets.

Recently, the city of Hoquiam helped pave the way for the deal when the City Council granted a street vacation petition to the new ownership group for an alleyway adjacent to the facility.

“The city did what we could to fast-track this and help them out,” said Hoquiam Mayor Jack Durney. “The important thing is people will be going back to work and shopping here in stores.”

He noted the city stands to gain from the facility’s taxes and utility fees that it pays.

“We’re looking forward to the changes they are making in production there. It’s going to be a new life for that mill and the people who work there,” Durney said.

Durney credited Greater Grays Harbor Inc. – the organization formed by the merger of the Chamber and the Economic Development Council – with helping to “link up the new owners with various training dollars and other opportunities to start up a business in the state.”

“We think it had a bit to do with helping Pacific States Industries decide to come here,” Durney said.

Tim Gibbs, Greater Grays Harbor, said the reopening should help lower a county-wide unemployment rate that dropped a full percentage point in April to 13.2 percent from March’s 14.2 percent. Grays Harbor’s unemployment numbers are second highest in the state behind Ferry County in Eastern Washington, with 13.8 percent.

Gibbs said he was particularly excited about the Hoquiam Plywood news because of the recent similar announcement that a group of investors is attempting to open the shuttered Grays Harbor Paper mill. Elliott Rust Holdings, LLC has signed a letter of intent to purchase the paper company, also located in Hoquiam. Grays Harbor Paper closed a year ago Friday.

“It’s a good day for the Harbor and its nice to have some momentum going forward,” Gibbs said. “With unemployment going down, hopefully, some better times are coming for the Harbor.”

Pacific States Industries is a privately-held family-owned company “that has been providing quality forest products and building materials to lumber dealers and home improvement stores in California, the Pacific Northwest and nationwide for more than 40 years,” according to a news release from Greater Grays Harbor Inc.

The company’s holdings include Pacific States Plywood, Pacific States Treating, Redwood Empire Wholesale Distribution and Redwood Empire Sawmills.

Businessweek.com reports that Pacific States distributes decking, fencing, hardwood, landscaping items, panel products, pre-built panels, softwood, and treated lumber, as well as other wood products. The company was founded in 1979, and Roger Burch, age 66, is listed as the owner and president.

The company’s Springfield, Ore., facility was purchased from the Weyerhaeuser Co. in July 2007 and also reopened a closed mill there that employed 87 people.

Hoquiam Plywood employees have said they expect Pacific States to hire approximately 60 workers and restart operations in the coming weeks. Employee-owners had voted to approve a potential sale of the mill earlier this spring.

General Manager Mark McFeely last week said former workers would be the first to be hired. He said the mill “is in excellent shape and as soon as we bring workers in it can start.”

The company in early April submitted an application for a business license with the city to operate the facility as Hoquiam Plywood Products Inc.

“We’re really excited that they are retaining the same management people there,” Durney said. “A lot of the employees are going back to work and it’s a happy day.”