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Potlatch still waiting for green payoff

Potlatch Corp. is waiting for market demand to catch up with a newly launched a line of environmentally friendly wood products.

The Spokane-based company began selling lumber and plywood certified by the international Forest Stewardship Council this spring.

The certification, backed by environmental groups, guarantees that the wood came from forestlands managed for attributes like woodpecker habitat, fish-bearing streams and preservation of old growth, as well as harvest yields. Potlatch is the first publicly traded U.S. company with the certification.

To date, however, the distinction has generated few additional sales.

Less than 5 percent of Potlatch’s customers request the FSC-certified products, which cost about 15 percent more than non-certified products. The orders, when they occur, are small.

“We had consultants who said, ‘As soon as you get certified, you’ll have people banging on the door,” said Mike Urso, Potlatch’s vice president of sales and marketing. “This concept – if you certify it, they will come – that didn’t work out the way we had hoped.”

But the company – which certified its Idaho forestlands in April – still sees the certification as a strategic move, Urso said. “From a credibility point of view, it shows we manage our lands in a responsible way,” he said.

Builders and consumers are starting to demand that, he said.

Cahuenga Elementary School in Los Angeles is being constructed with certified plywood from Potlatch. The company also shipped several loads of lumber to a Minnesota retail yard, which sold it a contractor for a commercial building in Kansas City, Mo.

“There are folks out there that want to reward excellent forest management. It’s a small, but growing market,” said Dan Haugen, owner of Certified Wood Products in Minnetonka, Minn.

Haugen ships lumber certified by the Forest Stewardship Council all over the eastern U.S., including the Potlatch lumber used for the Kansas City commercial building.

He credits the U.S. Green Building Council for raising demand for certified wood products. The Washington, D.C., nonprofit has developed a rating system for new commercial buildings. The buildings get points for energy efficiency and use of environmentally friendly products, including FSC-certified lumber and plywood.

Next year, the council will release preliminary standards for residential buildings. Potlatch anticipates a boost in demand when the ratings are released.

Commercial buildings use relatively small amounts of wood, Urso said. Their main materials are steel and concrete. Residential construction, however, uses quite a bit of wood.

“I think it will be a totally different ballgame,” Urso said. “We’ll go from having lots of wood and not enough customers to the other way around.”

The number of cities passing green building ordinances is also on the rise. Last week, the city of San Francisco announced that all new city buildings had to comply with the U.S. Green Building Council standards. Seattle, New York, Pittsburgh and Portland are other “hot spots” for green building, Urso said.

More than 5,000 delegates are expected at the Greenbuild Conference and Expo next week in Portland. Potlatch sales staff will be there, too, pitching their product.

Carrington Barrs, a Portland contractor, specializes almost exclusively in green building. His projects range from fences made of FSC-certified cedar, to multimillion-dollar office buildings.

Many of his clients have a strong environmental ethic. Others want to be able to advertise their office buildings as energy efficient and environmentally friendly,

“I try to help clients build as green as they can,” Barrs said. “When they’re driving up to Mount Hood to go skiing, and looking out over the clear cuts, they know what they built didn’t contribute to that.”