WRANGELL - Silver Bay Logging Co. plans to close its Wrangell sawmill, laying off all 50 employees in October, if not sooner.
Pat Joensuu of Silver Bay said the amount of timber available to the company is inadequate, is of poor quality and expensive to access.
"The timber sales that the Forest Service is putting up, now and in the future, are low quality, low volume, difficult to access, in that probably half of them require helicopters to remove the timber, and we just can't make money flying two by fours around is what it comes to," Joensuu told the Wrangell Sentinel.
The company's decision to close was also based on high fuel and shipping costs and its difficulty disposing of wood waste, he said.
Silver Bay emerged from Chapter 11 bankruptcy last spring after a court-ordered corporate restructure.
The mill opened officially in March, with the promise of a $1 million financial boost from the city of Wrangell.
Company officials said all their workers will be eligible for state retraining programs. The mill property and all associated equipment are for sale.
The company currently has helicopters, tug boats, barges, tractors and other specific mill machinery that will all go on the market.
"Keep it in mind that any potential buyer is going to face the same problem that is choking Silver Bay - inadequate timber supply," Joensuu said.
"This mill is getting relatively old, and in order to modernize it or change it, it will take a lot of timber to turn enough money to pay back the investment," Joensuu said.
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