Posted 5/21/2012 12:00 am
Updated 12 months ago
The Great Recession officially may have been over for a few years, but for lumber companies like Anthony Forest Products it lingers, wrestled into something like submission by the firm's adoption of technology, dedication to quality and simple grit.
(Click here for a list of the largest private companies in southwest Arkansas.)
"We're on the bottom, but at least we aren't looking for a new bottom at the moment," Aubra Anthony, president and CEO, said at his company's headquarters in El Dorado.
The company, which makes lumber and engineered wood products, reported $95.4 million in revenue during its fiscal 2011, which ended more than a year ago, on April 30. As for fiscal 2012, ended April 30, preliminary estimates have revenue at $90.2 million, Anthony said.
The company that employed 450 before the housing crash of 2006 now has, depending on seasons and shifts, 231 workers.
As a supplier to the construction industry, Anthony Forest has been hit hard by the housing bust. Housing starts peaked in 2005 at more than 2 million a year, fell off a cliff to about 600,000 in 2009 and 2010 and in April were at an annual rate of 717,000. "Our sales are basically half of what they were," Anthony said. "So we haven't fallen as far as the market, which is the comfort you get of being a survivor."
He says the words with a kind of grim satisfaction, taking solace where he can.
Consumer spending, Anthony said, has returned to 2007 levels, though "most people don't know that." The laggard in the United States' slowly improving economy remains construction. And that, "if it were back anywhere to normal, would add 4 percent to the gross domestic product and things would be rolling again," he said.
But when you've been part of the community and state as long as Anthony Forest Products - various Anthony family members have been in the timber and forest products industry in south Arkansas, eastern Texas and northern Louisiana for more than a century - you take your role seriously, and the biggest part of that role is just surviving so you can continue to provide jobs.
Anthony Forest Products operates a mill in Urbana, about 15 miles southeast of El Dorado, producing Southern pine lumber; wood chip mills in Plain Dealing, La., and Troup, Texas; an engineered wood laminating plant in El Dorado; and a laminating plant in Washington, Ga. It also is in a joint venture in Sault Ste. Marie, Ontario, with Eacom Timber Corp. of Montreal to produce wood I-joists, branded as Power Joists.
A 2010 fire at the company's sawmill in Atlanta, Texas, led to its shutdown and the loss of 78 jobs.
Anthony Forest Products, however, is focusing its latest efforts on a $25 million expansion and modernization of its planar mill in Urbana, which employs 75.
Kerlin Drake, vice president of marketing for Anthony Forest Products Co., recently told Arkansas Business that the improvements would raise productivity by 50 percent and efficiency - recovering more lumber from a log - by 5 to 10 percent.
Anthony is excited about the implementation of several improved technologies at the plant. They include dual-path kilns, powered by wood waste and which allow lumber to move through the kilns continuously; a computerized scanner that determines the most efficient way to cut individual logs, "squeezing more value out of every log" as Anthony said; and processes that test and grade each board.
In addition, the company is somewhat protected by a measure of diversification. Not only does it manufacture lumber, it makes value-added products such as its Glulam laminated beams used in the framing of buildings.
Anthony Forest Products also has two wood chip mills, the "old bread-and-butter chipping of pulpwood into manufactured chips that are shipped to paper mills primarily," Anthony said.
And the company resides next door to Texas, which despite the downturn remains a strong market for Anthony Forest Products. "Basically, we export product to Texas and we import money to Arkansas," Anthony said.
By focusing on efficiency, cost-cutting, volume, customer service, just-in-time deliveries out of its plant in Canada and quality, the company is holding its own.
In fact, companies that once were Anthony Forest's competitors are now buying engineered wood products from Anthony, he said. That's because the downturn forced those one-time rivals to close their facilities, so Anthony Forest Products is doing "private labeling," making items such as I-joists and putting other companies' names on the products.
Anthony called this a big compliment.
"I think we've learned a lesson about investing in hard times," he said. "You become more efficient. And when the market turns, if this one ever does, you will do better leveraging those efficiencies."
As for the future, "I look at the glass as half full because, thank God, we have some market left," Anthony said. "People are actually putting one foot in front of the other and doing things in spite of all the obstacles, and we mightily appreciate folks building anything out there."