NORTH BEND, Oregon – Southport Lumber continues to evolve and continues to make use of every speck of fiber from a log. In its latest evolution, the company – faced with a setback – embarked on a new initiative and capital investment to tap an unreached market.

Southport Lumber was founded in 1998 by Jason Smith and Jim Lyons, who still own the company and are actively involved in it. The company employs about 230 people – referred to as “team members” – in operations spanning timber procurement, logging, manufacturing, transportation, logistics, and administration.

The heart of the company is a high-efficiency, small log sawmill strategically located on a 65-plus acre site along the main shipping channel of Coos Bay. The site is served by rail, barge, and truck, allowing for flexible sourcing and distribution options. The plant has over 200,000 square feet under roof, including the sawmill, planer mill, dry kilns, whole log chipping plant, pellet mill, and multiple support buildings. The lumber mill operates on a two-shift, five-day schedule,

Southport’s sawmill produces between 4.5 to 5 million board feet per week of Douglas fir lumber, including random-length dimension lumber, studs, and small timbers. Core products include 2×4 and 2×6 random length dimension lumber and stud grades, with lengths ranging from 6-16 feet.

The original mill was built on a modest 15-acre parcel just south of Coos Bay, constructed with used equipment and a lean budget. The founders’ vision was to extract maximum value from underutilized fiber — pulp logs — through aggressive merchandising and targeted breakdown strategies. In weak chip markets, pulp logs would be redirected into lumber production; in strong chip markets, the mill would function more as a chip producer with lumber as a byproduct.

The company outgrew the plant, and Smith and Lyons acquired a larger parcel from the International Port of Coos Bay. The new mill was two years in the planning and designing stage. Company leadership toured over 50 sawmills in North America and Europe. The new sawmill and planer mill, with advanced automation and increased production capacity, began operating in 2006.

Since then the company has made a number of other capital investments: a natural gas boiler and kilns, a barge slip, a second log merchandiser and sawmill line, and a whole log debarker and chipper. The new pellet mill, dryer island, and pellet storage facility began operating this year.

Southport employs loggers and also relies on contract loggers to supply the mill with logs. Over 50 percent of the surrounding timber base is owned by the U.S. Forest Service, the federal Bureau of Land Management, and the state of Oregon. However, over 90 percent of Southport’s log supply is sourced from private industrial timberlands.

“This reliance on private ownership reflects longstanding harvest restrictions and administrative uncertainty on federal lands, making public timber less reliable for consistent mill supply,” noted Bruce Avery, Chief Operating Officer.

The company buys timber that provides about 30 percent of the logs it requires. The remaining 70 percent are ‘gate’ logs delivered by contractors. However, local timber supply alone is insufficient. Southport developed an innovative marine-based log import strategy. It acquired a barge and high capacity crane in 2019. With the barge it can source logs from western Washington and British Columbia.

The primary species is Douglas fir. Southport purchases a broad spectrum of conifer log classes, including pulp logs, chip-and-saw logs, and small saw logs. “This mix allows us to fully utilize the log — from lumber production to chip recovery to residual conversion into pellets — ensuring value is captured at every step,” said Avery.

The company also buys hardwood pulp logs — mainly alder, maple, myrtle, and tanoak – for its whole-log chipping facility. It occasionally resells high grade hardwood logs to specialty markets.

Southport has made strategic moves into international markets in recent years, notably for chips and pellets.

“As global interest in low-carbon, renewable materials grows, we see significant future upside in expanding our presence in sustainable bioenergy markets,” said Avery. “Our ability to integrate production, transportation, and export logistics allows us to offer tailored solutions to both domestic and overseas partners.”

The catalyst for developing a pellet plant came in late 2022: the largest consumer of sawdust and shavings in southwest Oregon — a regional particleboard manufacturer — announced its plant was closing. This left Southport and other regional mills with limited outlets for residual fiber.

“With rising disposal costs, storage limitations, and no short-term market recovery in sight, the Southport team began an intensive market evaluation to determine the most viable long-term use for our residuals,” said Avery.

Southport entered into a joint venture with another company facing the same challenge to develop a marine pellet export terminal. The collaboration provided the scale necessary to support overseas markets — specifically the Japanese utility sector, which requires long-term, large-volume contracts for clean-burning, sustainably produced biomass fuel.

“Southport’s entry into the pellet market was not only a defensive strategy to protect against by-product market collapse, but also a forward-looking investment in the global transition to renewable energy,” said Avery.

The pellet mill was designed to be modular, scalable, and integrated with existing operations. The pellet plant was supplied by Prodesa, a Spanish engineering firm specializing in turnkey pellet systems. The rotary drum dryer island was provided by Solagen, while the raw material feeding and handling systems were designed in partnership with Rorey Mitchell and structurally engineered by Crow Engineering. The facility was designed to accommodate a second production line in the future, with much of the infrastructure — conveyors, dryer capacity, and raw material handling — already oversized to support expansion.

Live-bottom chip trailers deliver green sawdust, shavings, and dry shavings from the sawmill. They are unloaded and metered into live-floor storage bins, and conveyed to the Solagen rotary drum dryer. Once dried, material is blended with dry shavings and stored in a Ladig dry material silo. From the silo, material is passed through a Prodesa hammer mill, then into a Prodesa pelletizer, followed by a cooler and screener to ensure consistent pellet size and density. Finished pellets are conveyed to storage silos capable of holding 500 tons.

The pellet mill has a design capacity of 5.5 tons per hour with an expected annual production of 35,000 to 40,000 tons, which is closely aligned with the internal generation of sawdust and shavings. The mill is engineered to handle twice that volume if the company expands production in the future.

Southport is finalizing long-term agreements with Japanese utilities. First shipments of pellets were expected shortly after the marine terminal becomes fully operational in the summer.

“Every pound of residual fiber now contributes to the bottom line,” observed Avery.

The lumber mill is equipped with two state-of-the-art log breakdown lines. In the yard, logs are unloaded with high-capacity LeTourneau wheel loaders, then decked by size and species or sorted if classified as pulp logs. Logs are directed to one of two infeed decks based on diameter.

Logs over 8 inches in diameter are fed onto a PSI (Pulpmill Services Inc.) rotary log singulator and pass through a Nicholson A8 debarker. After debarking they are scanned on a PSI V-flight conveyor and optimized using USNR scanning and merchandising software. Optimized bucking occurs at the PSI four-saw shifting log merchandiser. Logs are singulated with a PSI rotary log singulator, scanned, and turned using a knuckle turner before being set on a sharp chain. Breakdown on this USNR line begins with Andritz conical chip heads followed by side board profiling and removal via a quad arbor saw box. The remaining two-sided cant is rescanned, optimized, and passed through a 6-inch curve-sawing vertical arbor edger, with top and bottom profiling to extract maximum value. All scanning and control functions are optimized by USNR software.

Smaller logs (4-8 inches) are directed to a Comact wave feeder, debarked using a Nicholson A5, and scanned via Log Pro V-flight conveyors. The logs are then processed through a two-saw shifting Log Pro merchandiser, with optimization powered by Comact scanning software. The Comact DDM-6 small log line is designed for high-speed processing of logs in a single pass. Logs are scanned, rotated, chipped, profiled, and sawn in a continuous flow. Curve sawing, turning, and profiling functions are all integrated using Comact’s advanced optimization and control systems.

Lumber from both saw lines converges onto a shared Comact lumber transfer system. Boards pass over a double unscrambler and are loaded onto a lug chain via a Comact lug loader. The lumber is scanned, graded, and trimmed to length using automated gating and trimming systems. Boards are sorted into a Baxley Equipment 66-bin green sorter and stacked for drying or directed to green product finishing.

Rough green lumber designated for kiln drying is routed to a Comact dual unscrambler stick-placing stacker line, stickered, stacked, and moved to the three American Wood Dryers double-track batch kilns. The kilns have combined capacity to dry 2-2.5 million board feet per week.

Kiln-dried lumber is staged and then fed into the planer line, beginning with a Baxley-supplied breakdown hoist, backlog chains, and feed table. A customized Stetson-Ross 6-14 planer was retrofitted with Gilbert feedworks for a top feed speed of 1,800 feet per minute.

Finished boards are scanned and graded using a Fin Scan system, which identifies defects and optimizes cut lengths. Optimized boards are trimmed using a Baxley trim saw to standard or custom lengths. Southport also performs precision end trimming (PET) on specific products. Final sorting and stacking are performed on a Baxley sorter and stacker line, and all finished units are packaged using a Signode packaging system, complete with paper wrapping and product tagging.

About 50 percent of lumber production is kiln-dried; the remainder is sold green and surfaced.

Southport maintains a strong presence in the green lumber market, particularly in the western U.S., where green studs and dimensional products are a staple in framing-heavy applications. In addition to green 2×3, 2×4 and 2×6, the company manufactures green surfaced small timbers, catering to industrial and agricultural markets. Southport also manufactures mill run rough boards, primarily 1×4 and 1×6, in random lengths from 8-16 feet.

The ability to ship via rail directly from the site – about 70 percent of the company’s lumber is shipped by rail – enables Southport to serve a wide range of domestic customers, including high-volume distribution centers in the Midwest and beyond.

Integrating chipping operations at the new main mill site in 2020 enabled the company to consolidate raw material handling, reduce redundant transportation costs, increase chip throughput, and centralize labor and maintenance functions under one roof. The new whole log chipping facility includes a rotary drum debarker that was custom-manufactured in-house. The chipper was supplied by CEM Machine, a popular supplier of chippers in the Pacific Northwest, and conveyor systems were supplied by Log Pro.

Southport has developed a robust, multi-channel market for chip sales, both domestically and internationally. Chips are supplied to pulp and paper mills in the Pacific Northwest, British Columbia, and Japan. “Chip quality has remained high and consistent, helping us secure premium pricing in competitive markets.”

Southport’s residuals strategy is grounded in zero-waste principles. No wood fiber from the sawmill is landfilled. Every by-product — bark, dust, chips, and shavings — is diverted to value-added or energy-generating uses.

At the core of Southport’s identity is a high-performance culture — one that emphasizes safety, accountability, innovation, and results-driven leadership. “We’ve cultivated an environment where employees at every level are empowered to contribute ideas, solve problems, and take ownership of outcomes.”

Southport emphasizes hands-on mentorship, technical training, and cross-functional mobility. Entry-level employees are given clear advancement pathways, and our leaders are expected to coach and develop their teams, not just manage output. Human resource initiatives include recognition programs that highlight innovation, safety, and teamwork, open-door policies that encourage upward communication and collaboration, and a growing focus on digital literacy and operational technology training to prepare for emerging tools and analytics.

Southport is an active member of the American Forest Resource Council, the Forest Resources Association, the U.S. Lumber Coalition, the Oregon Forest & Industries Council, the Pacific Lumber Inspection Bureau, and renewable energy associations related to pellet exports.

The company has taken a proactive stance regarding tariffs, working through industry associations to lobby for the exclusion of raw log imports from any new tariff classifications. “We have argued that these logs are not displacing domestic production but are instead filling critical supply gaps created by federal harvest restrictions and regional timber deficits.”

As it looks to the future, Southport’s identity is defined by a vision that balances tradition and transformation.

“Since our founding in 1998, we’ve grown from a modest regional sawmill—built on a shoestring budget with used equipment and a bold vision—into a vertically integrated forest products company with global market reach and diversified product offerings,” said Avery. “We will continue to do what we do best: produce high-quality forest products efficiently and sustainably while investing in innovation, technology, and people to ensure we thrive in a dynamic, global marketplace.”