Friday, October 17, 2008

Pulp Friction Update: Evergreen Sold!

photo source

Lee and Man Sold Evergreen to the "Worthy Pick Group" out of the British Virgin Islands.

Quotes and numbers are from todays Eureka T-S.

As the global economic downturn progresses, big timber industry firms with local facilities are now at odds.

Green Diamond (GD) and subsidiary California Redwood Co. (CRC) say that Chinese-owned Evergreen Pulp owes them millions of dollars for logs and woodchips they delivered to the facility. Likewise, Sierra Pacific Industries (SPI) says that Evergreen owes them big bucks for woodchips.

Yesterday, Evergreen CEO David Tsang said they have paid their bills, at least in part, as they loaded an estimated $6 million worth of wood pulp onto a ship destined for Hong Kong. “The economy of the world is putting us down a path where we need to survive,” he said.

'Join the club'. Green Diamond VP Neal Ewald has basically told Evergreen to suck it up, saying ”We understand Evergreen's cash flow and log inventory issues, but these are challenges that all forest product businesses routinely manage.”

The courts agree with the logging firms. Green Diamond has secured a lien in court against Evergreen for $516,000 worth of chips, logs and pulp. This means that GD owns said materials currently located at Evergreens facility. CRC has obtained a similiar protective order for $1.32 million. Sierra Pacific has a lien for $402,000 worth of wood chips.

Green Diamond currently has the distinction of being the biggest clear-cutter in the Redwoods and SPI is known for the same in the Sierra Nevada mountains. Evergreen is know for it's stinking plumes of toxic fumes over Eureka (You-Reek-a) and spilling toxic waste into Humboldt Bay and the Ocean.

Thursday, October 16, 2008

EverGreen Diamond?

As many have said, the Evergreen pulp mill shut-down will reverberate through our local economy. In the Sept. 5th edition of the Times-Standard, Evergreen's Rex Bohn talked about how the company was installing new machinery to help them split and chip whole tanoak logs for pulp. Green Diamond was hoping to sell them Tanoak logs for which there has previously been little demand.

Tanoaks have long been considered a pest by the timber industry after the industry ramapantly clearcut huge swaths of Humboldt forests following World War II and did next to nothing to help the land recover. The Tanoaks grew rapidly following the logging, in many areas they shaded out the formerly dominant Redwood or Douglas Fir. The Tanoaks are considered practically worthless by the industry and are usually burned, herbicided and/or cut and left to rot.

”We're able to take logs that usually just stay in the forest,” said Rex Bohn with Evergreen Pulp.

At the time of the article, Green Diamond Resource Company (GDRC)was negotiating a contract with Evergreen.

"Green Diamond Resource Co. is working on a long-term contract to provide tan oak logs to Evergreen," said company Vice President Neal Ewald.

I'm wondering how much GDRC was banking on this. I believe they have logged so rapidly that they are depleting their inventory of large second growth Redwood trees and in doing so are gambling with the future of this county. The second growth was somewhat lower quality wood then the slow growing Old-Growth Redwood but passable as a lumber product. The rapidly grown third and fourth growth Redwoods are flimsy and the wood is not red. GDRC and their ilk are destroying Redwoods reputation on the lumber market as a high quality rot resistant wood.

North Coast Journal 1/27/05:
The problem, according to (Michael) Evenson and others, stems from even-aged management, the practice of clearcutting many acres at once, replanting redwoods, then clear-cutting again as early as 40 years later.

"With their relatively short [logging] rotations, these trees aren't getting that big," says John Rogers, president of the Institute for Sustainable Forestry (ISF)"[The wood] has lots of knots [and the quality] is not that good."

I fear GDRC may be soon heavily reliant upon residential subdivisions to make ends meet as we saw in the final days of Pacific Lumber before the bankruptcy.

picture: Tanoaks killed with herbicide by Pacific Lumber in the Mattole.

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