State officials have identified adequate timber supply and sufficient funding to encourage an Oregon lumber company to operate the defunct veneer mill in Ketchikan, Gov. Frank Murkowski said Friday.
Timber Products Corp., a Springfield, Ore.-based lumber company, has agreed to resume negotiations with the state over operating the mill, Murkowski said.
"There were three significant roadblocks, which we believe we have been able to overcome," the governor said in a statement.
State officials have been looking for a company to take over the plant after Gateway Forest Products ceased operations in February 2001.
The plant is at the site of the former Ketchikan Pulp Mill, which was the major employer in that town for a number of years.
Ketchikan Gateway Borough officials have spent at least $18 million on the Ward Cove site to date, said the borough finance director, Al Hall. The borough owns the site and would like to sell or lease it, Hall said.
State officials have been negotiating with Timber Products to reopen the plant and begin production there as soon as possible. It could employ about 45 people.
Under the deal, Timber Products would operate the plant, and Juneau-based Sealaska Corp., a regional Native firm, would provide one-third of the timber. Veneer is a building product made from lower-grade timber not suitable as dimensional lumber.
Talks with the company had been suspended because Timber Products was looking for an adequate supply of wood and funding to bring the plant up to more modern standards, said John Manly, a spokesman for Murkowski.
The company needs about 30 million board feet per year to operate the plant, Manly said. The state has identified enough wood on state lands near Ketchikan, he said.
The Alaska Industrial Development and Export Authority would invest $3 million to purchase equipment for the plant, state officials have said.
It's unclear how much Timber Products would invest in the project. Timber Products officials could not be reached for comment Friday.