Dry Creek sawmill customers reach from Delta to Lebanon

Tim Bradner/AJOC

East of Fairbanks the forested plateau of the upper Tanana River seems to roll on forever toward Canada, unbroken except for rounded hills and one place where ridges of the Alaska Range cut north.

It’s northern boreal forest, mostly scrubby black spruce with occasional stands of tall, sturdy white spruce.

Out there, seemingly in the middle of nowhere 40 miles east of Delta on the Alaska Highway, is a thriving small community with a high-tech sawmill. It’s the Dry Creek community, a cluster of neat, attractive homes on large, spacious tracts, and a community school. There are about 20 families.

The community seems largely self-sufficient, with gardens in summer and a cow, its own source of local fuel, and a local industry, Logging and Milling Associates, Dry Creek’s main employer. Logging and Milling, or LMA, is a locally-owned firm that makes and sells custom-built log homes, lumber and wood pellets for fuel.

The homes are pre-cut with kiln-dried logs, packed up and shipped to buyers, or the customers come to Dry Creek. The buyers are in nearby Tok and Delta, and in Anchorage, the Mat-Su and Kenai Peninsula, and Lebanon.

That’s not Lebanon, Oregon.

It’s Lebanon, as in bordering on the Mediterranean Sea.

No kidding. Between Beruit and Tripoli in Lebanon sit two Alaska-made log houses as showpieces for a Lebanese businessman who hopes to buy and import more log homes from Dry Creek.

It was a quirk sale, of course, through one of those word-of-mouth connections Alaskans know well, and likely not a major new export industry for the state. Still, Brad Cox, one of the mill’s owners, hopes he can export more of the homes.

Quirk or not, it’s interesting that an Alaskan manufactured forest product packed in a container and shipped to the other side of the world can compete with cabins made of logs from Russia, which are the competitors in the region’s infant log-home market.

The Alaska houses were more expensive but they were also of higher quality, which the customer appreciated, Cox said.

LMA is owned by Cox and his partner, Tom Nerbonne, who live with their families at Dry Creek along with the mill’s eight employees. The company is proof that a small, well-managed natural resource enterprise can carve out a niche and even thrive even in a remote Alaska area, and in a traditional Alaskan industry that conventional wisdom says should be on the ropes — logging and forest products.

Chris Maisch, Alaska’s state forester, praises the Dry Creek operation as a model for Alaska rural enterprise but also an example of a zero-waste sawmill. Everything is used, if not as logs for homes and lumber then as fuel. Using waste wood, the company makes wood pellets increasingly used in Interior Alaska as a substitute for costly oil.

“They have one of the better examples in the Interior of a vertically integrated operation, meaning every part of the tree is used, and there’s no waste,” Maisch said.

The highest value part of the log goes to the highest value product, in this case log homes in kits or tongue-and-grove lumber, Maisch said. The slab (waste) wood is chipped and supplied as fuel, currently to schools in Delta and Tok. Sawdust is being used as fuel to provide energy to the kiln and to heat buildings at the mill and homes.

“They’re doing this the right way, and are almost an example of a ‘mill of the future’. They’re very innovative, and not stuck in the same old ways of doing things,” Maisch said.

If Cox and his partners are conservation-minded “New Age” loggers, they’re motivated by the bottom line and a desire to preserve their livelihood, and the community. The partners in LMA grew up at Dry Creek and started out in logging in the late 1980s and did well through the mid-1990s felling local timber for Rayonier, a major forest products company.

The logs themselves were being sold in Asia.

“We began to wonder why the Japanese were willing to come so far into the interior of Alaska and pay high prices for our softwoods,” Cox said. “We knew our product was high value. There were very few defects in our wood, and that is rare.”

The partners also realized that the pace of logging would deplete the high-value white spruce of the Interior forests. If industry couldn’t be sustained and there would be no more work.

“This is high quality spruce, but the resource is finite. If we kept up the pace of exports we knew we would log it out,” Cox said.

The solution was slowing the pace of harvesting, halting the export of raw logs and making higher-value products locally.

Forest industry professionals advised the group they were wasting their opportunities by selling the white spruce into commodity markets. Better to refocus on adding value locally, Cox was told. This was the start of a long period of development, trial-and-error, and finally success.

There had been a small mill at Dry Creek since 1992 but it was low-tech and labor-intensive. LMA had been formed by the partners to purchase the mill and mechanize the facility. Now it is totally mechanized and computer-controlled.

The business grew in increments.

“In 1992, we began to sell rough, green lumber and we started to shape precision-milled house logs in 1996 after a customer inquired if we could make house logs. We added a construction crew in 1998 to construct with the house logs we were producing. We have since constructed approximately 65 log shells for homes,” Cox said.

The largest units that have been built are 5,000 square feet, but most are smaller.

“In 2000, we installed the first of the kilns and a planer to increase the value of our products,” he said.

Drying takes the moisture out of the wood and reduces later shrinking. Sometimes the shrinkage doesn’t show up for two or three years.

“At first, the kiln was used to dry one-inch and two-inch tongue and groove products, but now we have found that the kiln was good for the houselogs,” he said.

LMA is now the state’s only mill and log home manufacturer that dries logs with a kiln. Being dried, the logs are pre-shrunk and can be cut with precision at the mill.

There are other mills in Interior that make house logs including two near Tok, one near Delta, and one in Fairbanks, but the Dry Creek mill is the only facility that can dry its logs.

Operating the kiln isn’t a snap, because it must be kept at temperatures of 150 degrees to 170 degrees F.

“We are now focusing on making precut packages. We take your custom floor plan and make a ready-to-assemble kit out of the logs, which includes every log cut and every corner saddle -notched. These would show up at your building site packaged and labeled for construction. No cutting tools would be required,” Cox said.

Everything in the business plan is about keeping things carefully managed, at a small-scale, and adding value at different stages. That’s important because logging and fuel costs are high. Some areas where the company harvests are 75 miles from the mill.

Even though most fuel comes from wastewood, diesel is still needed to generate power. Last year the Dry Creek mill used 42,000 gallons of diesel. Cox would like to find ways to reduce this.

Keeping focus on the core business is important. For example, the company no longer does construction of its homes. Cox says its more efficient for a customer to hire a local builder.

Many customers or their builders just drive a truck to Dry Creek and load the pre-cut house package right at the company’s yard.

LMA also doesn’t supply all things needed for a house, either, such as floors and roofs. Those can be more efficiently supplied by local lumber yards and building suppliers, Cox said. However, two and four-inch tongue-and-groove boards can be supplied along with large wood beams.

The company also doesn’t have ready-to-go floor plans. “Just about every customer wants something a little bit custom. We would rather find out exactly what you want,” he said.

The company also does its own direct sales so Cox can deal directly with customers to make sure they’re satisfied. Quality control is critical. “When we make product, it’s irritating if we don’t have things totally under our control,” he said.

It takes about 100 years for a white spruce to grow in the Interior forest, which is why Cox and his partners want to slow the rate of white spruce harvest as much as possible. A typical white spruce is about 85 feet tall with the tree tapering at the top. About two-thirds of the three, typically about 50 feet, can be used as a log for home building or lumber. The remaining third can be used for other things, like fuel.

Cox said his group harvests about 100 acres a year, and any single harvest unit can be no more than 50 acres. Natural rather than artificial reseeding is best, and under state guidelines the loggers must prepare the ground surface where trees are cut to allow for the quickest reseeding.

Maish, the state forester, said the emerging biofuels market in the Interior is important because it allows fuel products like wood pellets or wood chips to be made from parts of the tree previously wasted. As the local biofuels market grows it improves the economic viability, and sustainability, of the industry because the value of wood for fuel is high as it offsets fuel oil, which is $4 a gallon or more in the Interior.


Tim Bradner can be reached at [email protected].

11/08/2012 - 9:22pm