Upstate Business Journal
Logging

New Program Chops Logging Costs

March 14, 2014

by Jennifer Oladipo
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Generating $17 billion a year, timber is South Carolina’s No. 1 cash crop, and forestry is its top manufacturing industry. Now the state is the pilot site of a national program organizers say will support the many small businesses that make up the industry by reducing their fuel costs.

The program will create a system of fuel depots throughout the state that will save loggers an average of 10 cents per gallon. The South Carolina Timber Producers Association (SCTPA) will be the first statewide group to have a formal agreement with the Southern Loggers Cooperative (SLC), which operates 21 depots in seven other states. Its only S.C. location opened near Georgetown in 2012.

“We told them, ‘We love what you’re doing, but you’re moving too slow. We need to find a way to help you,’” said Carlton Owen, president of the Greenville-based U.S. Endowment for Forestry and Communities (EDC).

As middlemen, loggers take the biggest hits, Owen said.

“Those small businesses [since] the recession have just been hammered. They can’t get money [because] credit is tight. They’re squeezed by the landowner on one end, and they squeezed by the mill owner who wants the lowest price… The problem is they’re everybody’s problem and nobody’s responsibility.”

The EDC is taking some responsibility by partnering with SLC, SCTPA and the Natural Capital Investment Fund (NCIF) to extend the reach of SLC’s system of fuel depots. They are essentially small, unmanned gas stations. Lack of staff reduces overhead, and the bill is charged automatically to the company.

The group will conduct a study in the next few weeks to determine locations. Newberry and the area between Greenville and Cowpens have been discussed, Owen said. They will be developed one or two at a time in areas where they can serve the most people the fastest, Owen said.

SCTPA members are enthusiastic about the program.

“It was a unanimous vote, and let me tell you loggers rarely vote unanimously on anything. They are a violently independent bunch,” Owen said.

SLC will own each depot on behalf of its cooperative membership. SCTPA will help identify appropriate sites, work to expand co-op membership and receive a portion of the revenue generated. In addition to fuel cost savings expected to add up to thousands of dollars, members receive annual dividend payouts.

EDC works nationally in support of the forestry industry, which faces major challenges, such as an aging workforce and high cost of entry into the field.

“We’ve focused on one near-term thing we can help them on, which is reducing price of their diesel fuel,” Owen said.

Most loggers are small, rural-based companies that have been in business for decades. They hover in the range of about three to 20 employees, although even the smallest crew must spend close to a $1 million in start-up costs.

Owen said loggers are the most disadvantaged part of the value chain. “The industry often looks at the paper mill, but what if you don’t have the logger providing the wood? You don’t move the mill and you can’t move the land; you move the wood. You’ve got to have that cadre of workers that can do the negotiating back and forth.”

 

Tags: energy efficiency, forestry, small business

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  • John Boyanoski

    great story!