Deal Watch: Ochoco to build wood pellet facility

OBM-091709--153Hit hard by declining harvests, the housing slump and the recession, Oregon timber towns have turned to everything from mountain bikes to microbrews to try to fill the economic void.

OBM-091709--153BY JON BELL

Hit hard by declining harvests, the housing slump and the recession, Oregon timber towns have turned to everything from mountain bikes to microbrews to try to fill the economic void.

But Prineville-based Ochoco Lumber Company is sticking with something a little closer to home to stoke up its Malheur Lumber Company in John Day: ponderosa pine wood pellets.

In November, the 77-year-old Ochoco received a $4.9 million economic recovery grant from Business Oregon to build a wood pellet fuel facility in John Day. The grant, funded with federal stimulus dollars, will create 11 new jobs and retain 80 positions at the Malheur sawmill operation. That plant processes about 30 million board feet of ponderosa pine annually, down from some 50 million board feet in its heyday.

"Without this grant, we would have had a serious concern about being able to continue to run the operation," says Bruce Daucsavage, president of Ochoco Lumber. "Now, we'll have the ability to make a multitude of different products, which will make us more competitive and give us a better opportunity to retain jobs."

Ochoco planned to break ground before the end of 2009 and have a drying system and two pellet-making machines installed by summer. Production, which could range from 25,000 to 40,000 tons annually, is scheduled to begin this fall using woody biomass from surrounding national forests as the raw material.

Ochoco has partnered with Bear Mountain Forest Products, a Cascade Locks company, to market the pellets and compressed bricks to hospitals, schools and other commercial buildings in the region that are heated by boilers.

Daucsavage says the hope is to ultimately increase output at the pellet facility and add even more jobs, all while helping to manage the surrounding woodlands wisely.

"We have a lot of responsibility and a lot of exposure, but we want to do it right," he says. "This is a great opportunity for our little town."

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