Winslow is facing the biggest economic opportunity it has seen in years with the proposal by Arizona Forest Restoration Products (AFRP) to build a new $385 million Oriented Strand Board (OSB) production facility near the west end of town.
AFRP plans on opening 150 jobs in Winslow for this operation, the starting pay for the least skilled of positions was over $38,000 a year or $17.50 an hour.
AFRP will bring much needed building products to the construction market, while cleaning up and helping to restore the health of forests in the Southwest. AFRP's business plan is now complete and they are beginning the permitting and engineering phase of their development.
"AFRP has secured an option on the purchase of 300-acres in Winslow," said Winslow City Administrator Jim Ferguson.
This means AFRP put down money or stock options to keep the current landowner in an agreement to sale.
If everything proceeds according to plan, construction will begin around September 2007 and be in full operation by the beginning of 2009.
"The reason we chose Winslow was due to its location in relation to all the National Forests in the Southwest. Winslow also has a fantastic location on I-40 and the BNSF rail, and good connection to the forests south along the Mogollon Rim," said Pascal Berlioux, president and chief operating officer for AFRP in Flagstaff.
Berlioux said Winslow also has a water treatment plant for which AFRP would like to utilize some of the treated wastewater for their production.
Those who have been looking for such a company that could utilize and profit from small-diameter wood, say AFRP has made it further than any obstacles faced by previous companies with similar proposals. AFRP is enthusiastic and has worked quickly to get as much advice and knowledge and support from regional scientists, loggers, the Forest Service, local communities and industry-related professionals.
Once this project gets going, there are also plans for a business partner to build a 24-megawatt biofuel power plant next to the OSB facility. This would utilize the leftover branches and leaves to create electricity for the OSB plant and to go back into the power grid.
Northern Arizona Forest Restoration
For years, foresters concerned about the overgrowth of forests in the West have been asking the federal government to fund tree-thinning projects to protect people, property and ecosystems from devastating crown fires as seen with the Rodeo-Chedeski Fire of 2002 that burned 462,614 acres in northern Arizona. This event got Congress' attention, but at the current rate of funding, forest restoration in the Southwest could be complete in a few hundred years.
Many in the logging communities blamed the environmentalists for the devastation while science tells a different story.
The Ecological Restoration Institute, an independent research and educational institution located in the School of Forestry at Northern Arizona University, has been studying the problem in recent years.
This is a summary of their findings: Since the mid to late 1880s, fire cycles ceased to be a common occurrence in the forests here as more and more settlers moved west.
Loggers over-logged to supply industrialization; an example being the Transcon Railroad through Winslow and Flagstaff that used forest logs to build the track, and once it reached Los Angeles, even more logs where cut and shipped by rail.
The over-cutting of ponderosa pine made way for more grasses, but then it was government policy of bounty to kill all predators like wolves, bears and mountain lions, this drastically increased grazing animals like the elk and deer. Irresponsible ranchers grazing in this area made the problem much worse.
Eventually the ponderosa pine came back, but many fold. Where once the average strands of pine were about a dozen per acre, they now stand on average of hundreds per acre. Since the pines have grown in small-diameter thickets, they compete with themselves for resources and cannot grow large in size. This problem does not allow the pine to grow to anything desirable for timber, it hurts the forest ecosystem and expedites intense fire.
Forest restoration in recent years has sought to help correct this problem by removing the small-diameter trees, however, government funding is limited and no one has been able to plan, design and market a forest restoration product effectively. That is until now.
Arizona Forest Restoration Products
AFRP, based out of Flagstaff, has been around for over a year organizing investors, staffing company management and designing their business plan.
Berlioux, originally from France, began his career in engineering startups and turnovers, including being production manager for a wood panels manufacturing plant, industrialization manager for the largest wood furniture factory in France, and plant manager for the first wood & cement panels production plant in Europe, which he built and started.
The primary investor, Chairman and CEO of AFRP, is Donald B. Walters Jr. His background is in construction, management, and real estate. His last company, Primary Systems Services Group, LLC employed over 250 people and averaged over $27 million a year in revenue.
Walters is involved with the Northern Arizona Building Association, which he presided over in 2004. He also was a National Director for the National Association of Home Builders, and he is currently a board member for the Environmental Issues Committee of the National Association of Home Builders.
Berlioux said AFRP's vision is to be part of the solution in restoring sustainable health to the forests of Arizona with wise stewardship guided by the science of restoration ecology, and to improve the safety of forest communities threatened by unnatural wildfires.
"We intend to use state-of-the-art technology and sound scientific practices to offer a reliable source of quality building material that provide a better product than the non-renewable alternatives," Berlioux said.
As a part of AFRP's sustainable plan for production, they intend to use wastewater from the Winslow Water Treatment Plant, which Berlioux said, will not even use as much water as the total amount of households they would employ in Winslow.
Water will be mixed with a new MDI-free resin called Ecobind from a company called Hexion. This resin to be used by AFRP is different from that typically found in other plywood or strand boards because it will be much safer for the environment.
Berlioux said they plan to contract with only the utmost certified crews and equipment to go into the forests to collect 5-inch to 14-inch diameter ponderosa pine. This he said, through logging, heavy machinery and trucking, would create another 3,000 regional jobs.
"Right now, the Forest Service is paying about $500 an acre to have it thinned," Berlioux said. "We will decline to be paid by the Forest Service to thin the forests. The payment of our service will be through the value of the wood."
There are currently 2.8 million acres in the identified area in the Southwest needing thinning restoration work. Berlioux estimates that this operation could last well over 100 years and will supply fastest growing market in a country with a demand for 3 billion square feet of OSB per week.
Currently, the only other OSB manufacturers are east of the Mississippi and in Canada; shipping their product 1,500 to their destination. With AFRP manufacturing in Winslow, that shipping expense will be reduced and supply met.
Logging in the Southwest
Founder of the American Logging Association, Allan Ribelin, also secretary and treasurer of High Desert Investment Co. in Flagstaff, is holding off on his celebration "until AFRP begins pouring concrete."
Ribelin's family has been in this timber harvesting operation for 50 years. Ribelin has seen the closure of lumber mills in Williams, Flagstaff and Winslow as Forest Service policy changed along with public attitudes towards logging. Through this decline, his family business has survived.
He said the government thinning contracts for his family's logging company's services barely keep one crew and equipment employed, and many of those are family.
Ribelin said he has been working with AFRP for a while to give them the advice they need to make this operation happen.
From Ribelin's perspective, what AFRP is asking for will get very expensive.
"We have one crew with equipment with equipment that can thin 8 to 13 acres a day for 10 to 12 loads of wood. This is $1 million in hardware,' Ribelin said. "To produce what AFRP is asking, will require $20 million in forest harvesting equipment."
Ribelin put the cost per crew at about $4.8 million when including all the equipment and adding the cost to build roads and transport the wood out of the forests.
He said he is about 90 percent confident in AFRP ability to succeed and hopes they do as it will improve his own business.
"The big boon that could allow this project to succeed is that everything these days is built with OSB and that this operation would be centrally located to all the major growth and development areas in the country," he said. "AFRP will need the government to make the raw product available, and AFRP will need to pay equitable rates for procurement."