Open For Business
Why Freres Lumber Co. mill prospers while others plummet
Maybe it's as simple as where you put your trust. The Freres family - owners
of timberlands, veneer plants and a plywood mill in Lyons, Ore., trusts that the
timber industry will continue to have severe business cycles. So they don't get
too heady about the good times. Likewise, in bad times, they're reluctant to
panic. Financed largely from corporate investments and savings, the company has
a history of using bad times to rebuild their plants, reconfigure their product
mix and await the next inevitable upturn in the timber economy.
Charlie and Trix (team
of work horses) with T.G. Freres in 1924. The team was used both for farm work
cutting hay, for example, as well as skidding logs out of the woods.
Co., Inc. started in 1922, when "T.G ." Freres traded a piece of his
family's farm equipment for a small saw mill in the Santiam Canyon area east of
Salem. Today, Freres Lumber Co., Inc. employs 425 people and is one of the
largest independent manufacturers of veneer on the West Coast. Grandson of the
founder, "Rob" Freres says the company has had to scramble to stay on
top of what was happening to the industry, both in the woods and in the
A group of saw mill workers
gather for a picture after their shift. This particular gathering was to
commemorate founder T.G. Freres' 39th birthday (July 20th, 1937). The young boy
to the right of the group is T.G.'s son, Bob, who is the current Chairman and
CEO of Freres Lumber Co. Bob was 8 years old at the time.
Decisions made by company leaders - Rob's father, uncle and grandfather -
managed to keep the financial pulse of the company steady, if not lively.
Perhaps they had an edge, being able to anticipate the coming changes that
others didn't see. But then again, maybe it was that family trust factor -
trusting that their own judgment, management capabilities and investment
strategy were a solid and consistent insulating factor against the furies of
timber economics. In 1959, during a time when plywood began competing with sawn
lumber, Freres formed a joint venture with Willamette Valley Lumber Co. (later
to become Willamette Industries).
An early Cat skidder unloading a steam donkey from a log truck trailer.
Freres says he believes this is how the steam donkey (used for yarding logs on a
cable side) was transported from landing to landing.
The partners constructed a large log veneer
manufacturing plant, selling the "green", eight foot sheets to plywood
manufacturers throughout the Pacific Northwest. The success of the veneer plant
followed the fortunes of plywood. Within a few years, Freres auctioned off a
small log saw mill that had carried the company thus far and invested in a small
log veneer plant, wholly owned by Freres Lumber. Rob's father, Bob, succeeded
T.G. as president in 1968 and added a stud mill to make better use of the
"peeler cores" from the veneer mills. In 1980, Freres purchased
Willamette's share in the large log veneer plant, which they immediately
upgraded and expanded.
During the 1980s, while many were devastated by the
economic recession, Freres continued to modernize. "We funded early
research and development of laser scanning, geometric centering equipment known
as an "XY Charger," says executive vice-president Rob, "which
significantly increasees the recovery of veneer from every log ." During
that time, they also began to immerse veneer blocks in vats of hot water rather
than exposed only to heated steam.
The boy in this 1902 photo is
T.G. Freres, future founder of Freres
Lumber. His grandfather is to the far left, with the big gray beard.T.G.'s
father is second from the left, and T.G.'s uncle is to the far right.
The Oregon Department of Environmental
Quality lauded Freres Lumber Co.'s work because it avoids the escape of
chemicals and contaminated steam by using recycled water. "Besides being
more environmentally friendly," says Freres, "this sort of
conditioning helps keep the veneer flat when peeled, and thus increases recovery
." As the industry moved towards second growth resources, Freres Lumber
invested about $7 million to modernize their small log veneer plant and log
storage yard in the early to mid 1990s.
A similar amount has been invested in
two Freres projects in the past few years. The first was to rehabilitate a
decrepit plywood plant purchased from the Young and Morgan company. The second,
now being completed, is a renovation and expansion to the large log veneer
plant, also known as Plant No. 2. Despite losing public timber resources in the
1990s and the currently depressed market prices for veneer and plywood, Freres
remains optimistic about the future of specialty plywood and engineered wood
products. Rob's father Bob continued to lead the company as president through
much of the 1990s, semi retiring but continuing on as Chairman and CEO.
The Freres Lumber Co. saw mill in operation in 1935, with log pond in
honored by the Associated Oregon Industries Foundation for his contributions to
the state, the only lumberman ever to be so honored by AOI in its 100 years.
Likewise, Oregon State University - through its Austin Family Business Program
paid tribute to him and the company in 1994, for leadership in the industry and
as a model for Oregon's community of family business. Bob's younger brother Ted,
a graduate of OSU, assumed the title of president in 1995, at age 45. "Ted
oversees the plant operations," says Rob, Ted's nephew but junior in age by
only a half dozen years. Among the things he's overseeing is the upgrade to
Plant No. 2. "We're spending nearly $3 million to upgrade a plant that cost
$300,000 to build in 1959," Freres reflects.
The company is banking on the
idea that adapting the plant to accept up to 10foot peeled veneer blocks will
give them new opportunities in the specialty veneer and plywood marketplace. A
future project will install a 40 inch debarker to complement the existing 60inch
debarker. Presently being renovated is the 8foot lathe and one green chain.
"We've adapted the block stops on the saws so we can cut eight, nine and
10foot lengths," Freres explains. "We've widened the lathe pedestals
and the new lathe will accept the longer lengths," he adds.
In place of the
older style guillotine clippers, Freres has added a 10foot rotary clipper. And
because nine and 10foot veneer is harder to handle manually, an automated Raute
Wood vacuum stacker will speed up production and eliminate one green chain.
Freres said that the combined upgrades will allow line speeds of over 500 feet
through Plant No. 2 stackers per minute! Veneer makes up about 60 percent of
Freres' total sales. In some years, the company produces up to 300 million
square feet. Numbers fluctuate, but Freres says that green veneer is about one third
of their total sold, with dry veneer making up the rest.
That which is
dried travels through 400degree, gas fired dryers (Plants No. 4 and No. 5). It is
then sent through a moisture detector and a density meter where it is stress
graded. "There aren't many of us making longer veneers," Freres says,
and adds that higher walls are becoming more popular in both residential and
commercial building and should provide them with new sales opportunities. Among
his list of veneer customers are Roseburg Forest Products Co., Willamette
Industries, Hardel Mutual, Boise Cascade, Linnton Plywood, GeorgiaPacific,
LouisianaPacific and Columbia Plywood. At their renovated plywood mill (Plant
No. 3), Freres Lumber may use some of the longer veneers to make 9 and 10 foot
Until now, the plant has been producing standard length
plywood, in thicknesses ranging from 3/8 to 1 1/8. As oriented strand board
gobbled up the residential plywood market in recent years, Freres and others
moved their product to manufacturers of laminated and engineered wood products,
such as trusses and floor joists used in construction. "That market has
virtually evaporated," says Freres, "because the price of 2x10s and
2x12s has fallen way below what it costs to produce the engineered wood products
He expects that the market will return, and points to Roseburg Forest
Products' new engineered wood products facility as a good sign. "We've been
shipping an average of about 13 million square feet per month, with one month
exceeding 20 million," says Freres. He estimates that the plant's output is
more than double what the plant was producing in the year before it was
purchased by them and rebuilt. More than half the cost to improve the plywood
plant were repairs to the wood fired dryers and rebuilding two presses. Freres
says they have a single head sander and are looking for a fourhead sander.
Part of the log yard at Freres Lumber Co. The stacking
crane was added in the 1990s as the company moved to smaller log sizes, The yard
was also paved to control runoff into the nearby Santiam River.
company plans to add a patch line soon, and expects that sanded plywood products
will make up about 15 percent of specialty product sales in the future. Plywood
accounts for more than 30 percent of total sales. Most of Freres' customers are
wholesale distributors and almost half of their product is shipped by rail, a
large portion of which ends up on the East Coast, says Freres. Besides wood
products, Freres also relies on its trucking division for about seven percent of
| Part of the
large log veneer plant at Freres Lumber Co., in Lyons, Oregon. More than 50% of
the company's process heating needs are met by the burning of bark and chips
from the plant.
Their fleet of 35 tractors (mostly Kenworth) haul timber, veneer,
plywood, chips and hog fuel. When a lumber company is still standing strong
after 78 years in this industry, you tend to take their advice seriously.
Freres' strength is tied to its practice of plowing corporate earnings back into
the company. Not coincidentally, that practice goes hand in hand with having
very little corporate debt. But all of that would be for naught if Freres
weren't also paying attention to product quality. "You can move product
even in a down market if you provide customers with the quality they
expect," Freres concludes.
Executive vice president Rob Freres stands in front of stacked bundles of
eight foot veneer. Freres is the grandson of the founder. His responsibilities
include product sales.
Tim Buckley is a freelance writer living in Oregon and is one of our regular
contributors to TIMBER/WEST. He has written about federal land issues since
working for the BLM in Alaska in the early 1970s.