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MARKET WATCH

Maine Forest Industry Positioning Itself for the Future

Posted by Eric Kingsley on April 24, 2017

Sometimes you need to step back, take a breath and evaluate things objectively. With a string of pulp mill closures, the Northeastern US forest products industry has lost markets for about 4 million tons of pulpwood and biomass since 2014. In a state with a total timber harvest of about 14 million tons, that’s a big deal. The entire supply chain—landowners, loggers, truckers and mill facilities—has felt the impact of these losses, and it hasn’t felt good.

As the situation continues to impact the supply chain, the forest industry in the Northeast is moving beyond talking about what has been lost and is now looking ahead to new opportunities. Just a few short years ago, firms looking to develop new projects in Maine faced stiff competition for almost every tree species and grade. Today, there’s lots of biomass and low-grade softwood available, and that means opportunities for new and expanding wood-consuming industries to establish themselves.

With demand prospects on the horizon, the new challenge will be in determining what opportunities are best for Maine, what existing and emerging products best fit the resources and infrastructure, and how to capture these market opportunities. The University of Maine and the state’s forest industry trade associations, which represent Maine’s diverse supply chain and manufacturing sectors, are now collaborating on a project called the Maine Forest Economy Growth Initiative to chart a path forward. With the support of over $1 million in federal funds—due in large part to the state’s Congressional delegation—as well as some state funding, the group is tasked with answering a number of questions, including:

  • What do the future forest resources of Maine (and its neighbors) look like? What are the species and grades available from the forest, and how will this change in coming years?
  • Who currently uses this wood, and what wood is underutilized by species, grade or geography?
  • What existing or emerging markets can utilize Maine wood in order to manufacture products the market demands?
  • How can Maine position itself to attract companies that want to invest in the forest sector?

Of course, the market doesn’t always wait for studies. Right now, multiple firms are looking at opportunities in Maine for siting bio-refining and biofuels facilities, and most of these firms are also looking to repurpose closed pulp mills and put idled assets to work. At least two firms have announced plans to export wood chips overseas. Other groups are evaluating wood pellet mills and engineered wood manufacturing operations.2012-02-02 16.11.55.jpg

It’s not just emerging industries that are drawn to Maine’s opportunities; investment at existing Maine forest industry facilities is strong as well. For example, one pulp mill recently commissioned two new tissue machines, and another mill has committed to nearly $200 million in investments to its wood-handling system and the rebuilding of a paper machine. A new biomass combined heat and power system is now operational at a Maine pellet mill, and another is being built at a local sawmill. 

Instead of focusing on what once was, Maine is now positioning itself to move forward by identifying and seizing on new opportunities. The state still has a robust and diverse forest, which is almost entirely under private ownership, and most timberland is managed under one of the leading recognized certification programs. The state also has an existing and efficient supply infrastructure, as well as communities that welcome forest manufacturing.

Maine has all of the pieces in place for participants in the forest products industry to flourish. As the state looks towards the future, the challenge will be finding those producers that are the best fit for Maine and its resources, and then attracting the private capital to help the state’s industry succeed well into the 21st century.

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Topics: supply chain, forest industry trends, northeastern mills

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