The coming of alder

New loan, Chinese trade boost prospects for Mount Vernon mill

By R.W. Clever

 

The lowly red alder was once considered to be a nuisance tree by the timber industry. Some forest managers even saw alder as a weed to be eradicated with herbicides. If it was appreciated at all it was as an easy-splitting, non-sparking firewood that imparted a sweet, smoky flavor to planked salmon.

But today that common tree that crowds riverbanks and the lower mountain slopes and ravines of Western Washington is creating new jobs in the ailing forest products industry.

The one-time “weed” has become a hot commodity among American hardwoods.

Nowhere is the alder’s resurgence more evident than in the big metal building on Farm to Market Road in Mount Vernon – home of Washington Alder LLC (limited liability company). After just a few years of operation, the company employs about 100 full-time, year-round workers with $5.5 million annual payroll and is in the midst of an expansion that is expected to double the volume of wood it can dry kiln on site.

Washington Alder’s main product is finished, planed lumber for use in the manufacture of fine furniture, cabinetry and veneers. It also makes pallets. While the company also processes maple and birch wood, about 70 percent of its output is from red alder.

Washington Alder not only owes its existence and success to the alder tree, but also to the dramatic changes sweeping the economy of the Chinese mainland, where many American furniture makers contract for the manufacture of their designs.

“About half of our output is exported,” said Jan Wiggins, Washington Alder’s sales manager. “China has taken over as the main Asian buyer. Half of our exports go to China.”

A major factor in Washington Alder’s growth and, in fact, its survival to date is the company’s chief operating officer, Dick Tinney, a veteran of some four decades in the timber business. He had been the retired, former CEO of Bohemia, Inc., occasionally doing consulting work when he was contacted by the owners of Washington Alder nearly two years ago.

The company was struggling to keep operating while carrying a debt load too high for its revenues.

“I agreed to do a six-month turnaround,” said Tinney, who did manage to improve the company’s operations within that time frame and, in September of 2000, accepted the CEO job.

The company recently got a significant boost to its expansion plans in the form of a $5 million rural development loan, backed with an 80 percent guarantee from the U.S. Department of Agriculture. Skagit State Bank is the actual lender.

The money will enable Washington Alder to refinance earlier loans, making its debt load much more manageable. The company will also purchase additional drying kilns to double its kiln capacity by the first of next year. Until then, about half of the wood processed by the plant is dry kilned at a mill in Sumas. After the expansion, the company will be able to handle all its dry kiln needs in house.

Tinney’s empire is a bit smaller than the one he ran at Bohemia, in Eugene, Ore., with more than 3,000 employees, but he is happy with his current situation.

“This is probably the most fun I’ve had in the forest products industry,” he said.

There doesn’t appear to be any limit on the growth of demand for alder wood products, especially in the export markets. Germany, Italy and Japan are major destinations for the finished lumber coming out of Washington Alder and other western mills. But China is looming as the biggest single customer.

Much of Washington Alder’s China exports will end up in fine furniture pieces manufactured on the Chinese mainland and shipped back to the U.S. under the labels of such firms as Ethan Allen, Drexel Heritage, Lexington, Broyhill and Hammary.

The American Hardwood Export Council (AHEC) tracks the flow of U.S. hardwoods overseas. During 2001, the two most popular U.S. hardwood species in China were red oak and western red alder, according to AHEC. Shipments of red oak lumber and veneer totaled more than $55 million in 2001. Western red alder lumber reached an export level in terms of value of $24.9 million.

“Western red alder is one of the most popular and emerging species of U.S. hardwood in China’s export market,” said John Chan, regional director of Southeast Asia and Greater China of AHEC.

“The marked increase of U.S. hardwood products exported to China was primarily fueled by the market’s increasing domestic consumption and the continual growth of the economy,” said Chan. “The rapid rise of disposable income of the people in China, coupled with the active commercial and residential housing developments has assisted in opening up a tremendous market for U.S. hardwoods — especially within the high-end interior furnishing and decoration category.”

U.S. hardwood exports to Greater China (encompassing mainland China, Taiwan and Hong Kong) overall increased 8.9 percent at $196 million in the first nine months of 2001.

There could be no clearer connection between Asian commerce and Skagit County jobs. Washington Alder expects gross sales to reach $25 million by the end of this year, fully one quarter of those sales accounted for by Chinese purchases.

The company buys wood primarily from about 40 suppliers in Skagit and Whatcom counties as well as from the Olympic Peninsula, adding to the employment base for those areas. Much of the timber is logged by small, independent operators from privately owned forests.

The wood is dried in one of the company’s three kilns and then processed.

Wiggins says that the company turns out furniture-quality lumber that is finished on both sides, planed by abrasives to produce a smooth surface.

The characteristics of alder lend themselves to a quality finish. When compared to other hardwoods, such as yellow birch, black cherry and sugar maple, red alder is considered one of the best for finishing, machining, sanding, polishing, color uniformity and gluing. The top grade alder is used to make fine furniture, cabinets and turnings while the lower grade wood is used to make furniture frames, interior parts and pallets. Alder is also considered to be a good pulpwood.

Red alder can grow to heights of more than 100 feet. It is the most abundant hardwood along the Pacific Northwest Coast, ranging from the Alaskan panhandle to the Central California coast. The tree generally grows at lower elevations, below 1,500 feet, but can occur at elevations of up to 3,000 feet. Low rainfall and low winter temperatures are the primary factors that restrict its range.

Red alder requires full sunlight and moisture for regeneration and good growth. It grows rapidly, but is relatively short-lived, usually deteriorating beginning at around 40 years.

The alder is an important part of the forest ecosystem, having the capability to fix atmospheric nitrogen, thereby enriching the soils for other tree species.

It is so useful that it is hard to understand how it could have been so devalued for so long.

Centuries before alder was “discovered” by the forest products industry, Northwest native people had many uses for it. They used it for smoking salmon. They used the cambium as an important source of food made into bread or soup, usually mixed with other foods. They used the sap as a beverage and for syrup and the dried bark as an emetic and astringent. They also made dyes from the bark.

But the alder tree was for most of the past 150 years of the Northwest timber industry regarded as a junk tree, taking up space better devoted to such as the Douglas fir, Sitka spruce and other softwoods in high demand in the construction industry.

Alder was often left on the ground to rot or be scavenged for firewood, or bulldozed or sprayed with herbicides.

The widespread use of alder has come on so recently that there are relatively few studies concerning its growth and management for harvest as a hardwood. But what studies have been done have raised concerns over the continuing supplies of red alder in the Northwest because of earlier forestry practices.

Supplies of hardwood were further pressured this year because of the unusually dry summer, which brought fire-related restrictions on logging in some areas.

“Log supplies were difficult for us this season,” said Wiggins, noting that conditions in the forest were too wet in the early spring and then too dry this summer. “There was no hardwood available from federal lands at all.”

A 2001 joint study by the Washington State Department of Natural Resources and the Washington Hardwoods Commission for the first time quantified the volume of hardwoods in the forests of Western Washington.

Aided by satellite imaging, the forests were classified by forest type and age class.

The study found that there are about 14.3 billion board feet of harvestable hardwoods in Western Washington, with nine billion board feet of that stock considered to be actually available for harvest once limitations such as altitude and streamside buffer requirements are added.

Of that volume, 84 percent is red alder, 10 percent big leaf maple and 6 percent black cottonwood.

The hardwood inventories are divided among three main groups over 5.74 million acres – large industrial owners such as Weyerhaeuser, 31 percent; state and local government, 38 percent; and small private groups, 31 percent.

While the rise of the alder has been a godsend to some distressed timber communities, there is a price to pay for its earlier neglect. Researchers have found that there is too little young alder in the Northwest woods because of “weed control” programs of the past several decades.

The scarcity of young alder is now a cause of concern to an industry that continues to grow at a time when there is no end in sight for the demand for the wood.

Tinney said that Washington Alder is now engaged in a “material availability” study that will help it determine, realistically, how much alder is available for harvest once all restrictions are factored in.

The biggest issue facing the hardwood industry right now, he said, are environmental requirements to leave stands of trees along the rivers and streams as buffer zones.

That requirement alone could reduce that amount of available timber by up to 50 percent, said Tinney.

To date, nearly all the alder harvested for processing to lumber has grown naturally in Northwest forests. The Weyerhaeuser Co., in a recent report, noted that the concept of alder “tree farms” is too new to even guess at how successful they might be.

“There are currently no growth and yield models available to forecast the yields from intensively managed red alder plantations,” the report said.

What research does exist suggests that the value of alder can hold its own against fir.

An Oregon State University report concludes that although volume recovery from alder logs is less than that from softwoods, alder lumber value increases dramatically as log diameter increases.

There have been a number of formal and informal economic comparisons of growing alder and Douglas fir, the report said.

“Some analyses show Douglas-fir to be a superior investment; others reach the opposite conclusion,” the report said. “Almost all, however, find little difference between the two options, in spite of the different assumptions of value and growth that each makes.”

Since 1980, alder prices have increased steadily, in contrast to fluctuating softwood prices.

The Western Hardwoods Association, in a recent publication, summed up the hardwood market:

“Current estimates show two billion cubic feet of merchantable hardwood in The Pacific Northwest’s forests today. Through proven forest management techniques that include planting hardwoods, ending harmful spraying, and offering hardwood and small mixed stands for sale, we could easily increase that number to 10 billion cubic feet in just 25 years.

“And these management changes alone could add billions of dollars to The Pacific Northwest’s economy annually.

“Softwood logging, as we’ve known it in the past, is coming to an end. The same doesn’t have to happen to our economy. The idea that The Pacific Northwest’s people depend on timber is certainly not new; but the idea that timber may also have broad leaves, certainly is.”

The rise of alder in the marketplace was not an accident.

The Western Hardwood Association decades ago began a marketing program aimed at increasing the visibility and acceptance of the Pacific Northwest’s most abundant hardwood. The association sent samples of alder all over the world. Today it is the third most extensively exported hardwood in the United States.

“Western alder is a fine-grained hardwood similar to cherry, birch and maple. It has a density or hardness comparable to Appalachian soft maple,” said David Sweitzer, the association’s secretary/manager.

“Over the last 25 to 30 years the price of alder has continually gone up,” he said. “This encourages landowners and land managers to harvest alder instead of trying to eradicate it.”

There are now about 60 alder management research sites covering a wide range of site conditions in western Oregon, Washington, and British Columbia. Each site is a 10- to 20-acre planting or thinning with a range of spacing treatments. The hardwood industry hopes to learn enough from these sites to develop cultural practices that maximize the growth of harvestable alder for the area’s mills.