Vaagen buys Usk sawmill

Vaagen Bros. Lumber Inc. has purchased a competing sawmill in Usk, Wash., a move that will help both mills weather a period of low lumber prices, the companies’ officials said Tuesday.

Ponderay Valley Fibre Inc. sold to Vaagen Bros. in early October. Though the parties declined to discuss the purchase price, citing confidentiality agreements, county records listed the sale of the mill and additional acreage at $20.4 million.

Ponderay Valley Fibre employs about 85 workers, whom Vaagen Bros. will retain.

The mills are located 50 to 70 miles apart, depending on which road you drive from Usk to Colville, where Vaagen Bros. is headquartered. Both operations focus on turning small-diameter logs into viable commercial products. The purchase will make the sawmills collaborators, instead of competitors, for timber sales from the surrounding Colville National Forest.

“It adds stability to both work forces,” said Russ Vaagen, vice president of Vaagen Bros. “The purchase of logs is the most difficult component of running a sawmill these days. This will allow us to get the right logs to the right mill. Both mills will be stronger.”

Thinning the forest of dense stands of toothpick-like trees is part of the federal “Healthy Forests Initiative,” Vaagen added. The thinning reduces the fire danger near communities, and returns the forest to a more natural balance of open, park-like stands, he said.

The sale also comes amid a period of 10-year lows in lumber prices, which has prompted mills across the nation to lay off workers and scramble for efficiencies. A slowdown in the U.S. housing market led to a drop-off in demand for lumber and lower prices.

As a result, “it would have been very painful for both operations to still be going individually,” Vaagen said.

Ponderay Valley Fibre was started by Steve Hermann in 1989. The operation initially turned logs into chips for the pulp and paper industry. Later, it added a sawmill component, producing rough, green lumber.

“I found myself at a crossroads,” Hermann said Tuesday. The company had grown to the point where it either needed to expand — adding its own planer and dry kiln to produce finished lumber — or sell to a bigger company.

Since Vaagen Bros. had recently upgraded its planer and kiln, it was the logical buyer, Hermann said.

However, Ponderay Valley Fibre will continue to send some of its green lumber to Merritt Brothers Lumber in Athol, Idaho, for drying. Vaagen Bros. doesn’t have quite enough kiln capacity to handle the loads from both mills, Vaagen said.