John Day Lumber Plant Rises Yet Again with New Supply of Timber

After coming close to shuttering its operations in 2012, the owners of John Day's Ochoco Lumber managed to re-invent themselves yet again and decided to invest $2 million to $4 million in the facility after federal officials awarded it a 10-year stewardship contract on the Malheur National Forest.

The stewardship contract was the result of an innovative and collaborative lobbying push by Oregon Governor John Kitzhaber, the state's Congressional delegates and several conservation groups. The U.S. Forest Service gave the contract to Iron Triangle, a John Day-based logging firm backed by the Blue Mountains Forest Partners group. The Blue Mountains members include representatives from the American Forest Resources Council and Oregon Wild.

It was not the first time that Ochoco Lumber, doing business in John Day as the Malheur Lumber Company, had re-invented itself to stay alive. In late 2009, a $4.89 million economic federal recovery grant from Business Oregon to company helped it construct a wood pellet fuel facility helping to retain an estimated 80 full-time jobs while creating 14 new ones in the community.

The 2009 grant came from federal recovery funds awarded to the U.S. Forest Service through the U.S. Department of Agriculture. Malheur National Forest officials engaged Business Oregon to carry out a competitive process to select a company to receive the stimulus grant.

In addition, in late 2010, Business Oregon awarded the company a $695,000 loan from its Oregon Business Development Fund and a $7,500 BOOST grant for job creation. The new pellet facility began production in early 2011 and is expected to create an estimated 14 new jobs.

The economic recovery grant will allow Ochoco Lumber, doing business in John Day as the Malheur Lumber Company, along with its partner Bear Mountain Forest Products, to produce pine fuel pellets for retail sale in the Pacific Northwest as well as Bear BricksTM—a compressed fuel product—from its John Day facility. Bear Mountain Forest Products, founded in 1988 and based in Portland, has manufacturing plants in Brownsville and Cascade Locks and sells its products to more than 400 retailers in the western U.S.

"We are very excited about this project," said Ochoco Lumber President Bruce Daucsavage. "This is going to mean good things for this community."

The plant also produces pellets for bulk delivery to such local users as Harney County Hospital, Burns High School and the John Day Airport. The company also hopes to significantly increase production one day by providing fuel pellets to large industrial users such as utility companies.

The recovery funds helped the company purchase and install a new drying system, two pellet-making machines, as well as the infrastructure necessary for the boiling and drying processes, said Daucsavage.

The new facilities will utilize biomass harvested from private timberlands as well as nearby National Forest and Bureau of Land Management lands. In addition, the existing facility can provide biomass supply in the form of residual materials such as sawdust and wood chips.