AIDEA board continues to explore purchase of Ketchikan veneer mill

Members wary about including sawmill in transaction

Posted: Sunday, July 14, 2002

ANCHORAGE - Bankrupt Gateway Forest Products' defunct veneer mill in Ketchikan could be resurrected, under an effort by the Alaska Industrial Development and Export Authority.

The authority's board voted Friday to try to assemble a deal to buy the closed mill, despite concerns that agency staff also is looking into buying an adjacent closed sawmill.

Board member Larry Persily, state deputy commissioner of revenue, said he sees merit in the state getting involved in trying to revive the failed veneer mill because there are no others of its type in the region. But he questioned state involvement with a sawmill because there are private sawmills already operating in Southeast.

"I'm not interested in getting into the sawmill business at all," Persily said.

Deborah Sedwick, an authority board member and Alaska's economic development commissioner, said she too was "not happy" to see a possible sawmill purchase rolled in with the veneer mill bid.

Board members voted unanimously, however, to allow the authority's executive director, Bob Poe, and his staff to try to put together a deal to buy the mills, the Anchorage Daily News reported. Friday's vote does not mean the agency will complete the purchase. It just means Poe now has the board's permission to try to put a deal together, with the board to have the final say.

The intent is not to operate the sawmill, according to Poe and an executive with a private company that would lease the veneer mill from the state and operate it. They said the sawmill contained equipment needed to run the veneer mill, and that it might provide storage space and some complementary woodworking capability for the veneer mill.

"We have no intentions of running this sawmill," said Joe Gonyea, chief operating officer for Timber Products Co., an Oregon plywood and veneer company.

Poe said the authority, if it can work a deal involving several parties, might be able to revive the veneer plant and create 50 plant jobs and as many as 100 logging and support jobs for Ketchikan.

Sealaska Corp. of Juneau, the Native corporation for Southeast, would supply logs from its extensive timberland. Foothill Capital Corp., a subsidiary of the Wells Fargo banking company, would get the state's purchase payment as the main creditor in the failed veneer operation.

Millions of dollars of debt and other problems ultimately drove the veneer mill into U.S. Bankruptcy Court after operating for only about a year. The bankruptcy case subsequently was dismissed, and the mill's equipment is to be auctioned Tuesday.

The state authority is trying to piece together a deal as quickly as possible to buy the veneer mill at a cost of less than $5 million, Poe said.

Trending this week:


© 2018. All Rights Reserved.  | Contact Us