“We had an old Corley semi-automatic carriage mill in a little 40-by-80-foot building when we started,” said Dave Buxton, who founded New England Forest Products (NEFP) with his wife, Deborah, in 1993. Today, the NEFP facility in Greenfield, New Hampshire, features a greatly expanded mill building (one that was rebuilt after a 1997 tornado leveled the original) with a computer-controlled sawmill, an office, two huge kilns, and a retail store. There’s little left that recalls the early days of the company, which is the reason it’s still in business.
The ability to evolve has been the key to survival since “The Great Recession,” which forever altered the sawmill industry in the Northeast. “The wood products business has changed so drastically since then – probably more so than at any time in history, or my history at least,” said Buxton. “Pretty much anybody who’s around today to benefit from the upswing in business has had to be innovative just to stay alive.”
In past economic dips, things would be down for a year or two before there were signs of demand returning. That wasn’t the case this time around. While economists say the recession that hit in 2008 lasted only about 19 months, Buxton has a different perspective. From early 2007 to summer of 2013, NEFP faced declining demand and lower pricing for its products, he said. “In our industry, that’s how we define recession. So we were in it for about seven years.”
Early in the downturn, things were especially dire. Buyers weren’t just dialing back on quantity, they were canceling orders. NEFP was forced to lower its prices just to move product, despite being saddled with expensive stumpage contracts it had signed based on anticipated demand and prerecession prices. “There was a point in time when the average log price delivered to this yard was very close to the average lumber value leaving, which left us no margin to operate,” said Buxton.
The story was the same at other mills. “Anybody who didn’t have some financial strength left over from 2005 and 2006 couldn’t sustain it,” he recalled. Buxton said that when he got into the business there were 16 hardwood sawmills operating in the state of New Hampshire; now there are three.
Green to Brown
In the beginning, NEFP was producing exclusively green lumber, most of which went to flooring and other wood products manufacturers in Canada. More than one-third went to a single architectural millwork customer north of the border for production of stair treads and hand rails. In the late 1990s, NEFP added a double-cut bandmill that doubled production, but the business structure went largely unchanged for more than a decade.
“Right up to the recession, logs would come in, we’d process them, and everything went out green. It was a pretty easy business,” said Buxton, who had no intention of messing with this “keep it simple, stupid” business model, until the economic downturn quickly made running the business anything but simple.
“Everything changed in 2007 and 2008,” said Buxton. The housing market collapse in the U.S., coupled with the end of a favorable exchange rate that had allowed Canadian producers a competitive advantage, plus a surge of import competition from China, caused the Canadian lumber market to suddenly evaporate.
“We went from sawing 50 hours a week at the beginning of 2008 – and that was the shortest we had ever run – to where we had to shut down completely for four weeks by May,” recalled Buxton. “We couldn’t get rid of the lumber.”
While many mill owners decided to liquidate and get out of the business, the Buxtons made a conscious decision to stay open and diversify. The couple secured a 50 percent matching grant through the New England Trade Adjustment Assistance Center (NETAAC), a federal program designed to aid companies negatively affected by imports, and used the funds in part to conduct market research. They learned that there was growth potential in kiln-dried lumber, but they’d need a way to make it. This meant not only drying but basic finishing – surfacing two sides of the lumber and straight-line ripping.
They also had to figure out a way to sell it. They hired a part-time employee, based on the West Coast, to drum up sales and then contracted with a lumber facility in Brattleboro, Vermont, for drying and planing. When it became clear that shipping lumber back and forth to Brattleboro was not a practical long-term solution, they created their own drying and planing operation. (The kilns were formerly used at an Ethan Allen mill in Maine and purchased at auction.) As part of the new venture, they opened a new retail building on site and also completed a major overhaul of their branding and marketing efforts with special grants from UNH and the Northern Forest Center.
Local Wood, Worldwide Market
By 2009, New England Forest Products had transformed itself from a wholesaler of green lumber to a multifaceted company that also sold dry lumber to both retail and wholesale markets around the world. “One day last week, we were loading tractor trailers with green lumber going to Canada, we were loading a container that was going to China, we had another container waiting to go to southern California, we had a flooring company that was picking up flooring, and we had two customers in pick-up trucks that we were loading with lumber,” said Buxton.
While some new equipment and infrastructure was required, it wasn’t a mass infusion of cash that transformed the business, but rather strategic decisions to tap into new markets that have proven successful.
“The retail business did very well its first year, and for the next three or four years it doubled every year,” said Buxton. The mix of customers is largely local contractors and homeowners, with some driving two or three hours for flooring. In some cases, they produce custom floors (NEFP makes the blanks and a contractor does the molding work) and ship them to individual customers around the country. The floors that NEFP manufactures include species such as hickory, birch, red and white oak, cherry, hard maple, and beech.
Custom timbers are another niche that NEFP got into and they’ve found solid demand from municipalities and contractors doing bridge and construction work, as well as for post and beam barns. “Nobody really makes timbers anymore,” Buxton notes.
One thing that hasn’t changed is NEFP’s reliance on local wood. Part of the reason Buxton chose a site on Route 31 in Greenfield was to ensure easy access to log trucks rolling in from southern New Hampshire and central Massachusetts. That continues to this day and the company recently purchased two of its own log trucks in order to ensure more timely deliveries.
“We try to make people aware that they are buying a local product that’s sustainably harvested, said Buxton, who’s also a licensed forester. “When you’re buying a stair tread from [one of the big box home products retailers], chances are the wood came from either Russia or the southern U.S., and it was shipped to China, where it was made into a product, and finally shipped back here to be distributed at the lowest price possible.” He added that NEFP is often lower on price than the national chain retailers.
To bring in local wood, NEFP works with a handful of independent logging contractors, some mechanized, but others still working traditionally. “Mechanized logging, unfortunately, doesn’t address a lot of the work I do – I work with a lot of landowners who don’t want two-acre landings and biomass harvesting. So I have two or three logging operators who are from the old school: they are very productive with chainsaws and skidders,” said Buxton, emphasizing his desire to support these hard-working local loggers.
Even as NEFP’s products find their way around the world, Buxton emphasizes that it all starts in the local woods. “Oftentimes people live here because they want to live in a rural community; they like the rural environment with the trees and the forests. Well, one reason those trees and forests are here is because the landowners are able to hold onto the land because they benefit from the value of the timber,” he said. “The timber that’s being produced here not only supports the company you’re buying it from, but also the loggers and the truckers and the landowners. People connect that very quickly if you tell them, but you have to tell them.”
This article series is underwritten by the Northern Forest Center, a non-profit organization. The Northern Forest Center creates economic opportunity and community vitality from healthy working forests in Maine, New Hampshire, Vermont, and New York.