Nearly a year after it shuttered particleboard manufacturing plants in North Carolina and on the North Coast, Hambro Group recently began dismantling its Crescent City plant.
Hambro informed its customers and suppliers last December of its intentions to shift its focus away from wood products, particularly particleboard manufacturing. It liquidated and sold plants in Arcata and Lenoir, N.C.
The Crescent City plant, Hambro Forest Products, was mothballed in the hopes that the company could start it back up if things turned around, according to company CEO Wes White.
"Recently we elected to liquidate the particleboard manufacturing portion of the plant," he said. "That portion of the mill that manufactured particleboard will be gone. The equipment is going to be recycled as metal."
Last year's plant closures resulted in Hambro laying off 60 employees - 46 workers in North Carolina, 10 in Crescent City and four in Arcata. The Crescent City plant had only been operational for about 50 days in 2011. Its employees collected unemployment insurance during the plant's off periods.
White said the decision to liquidate the local particleboard plant was based on changing economic conditions and the demands of the market. Much of what was manufactured in Crescent City went into flooring for manufactured homes, he said. That has since been replaced by a new product called oriented strand board - a structural panel that can be used like plywood.
Hambro Group has also seen the consolidation of the industry down to two or three players, White said.
"We were kind of in a niche market if you just look at the particleboard plant here in Crescent City," he said. "The market has just changed significantly with the introduction of oriented strand board into our marketplace. (Particleboard) is a product that kind of has lived its life and has been replaced by a new product."
Hambro's Crescent City particleboard plant was built in 1964 when the industry was still in its infancy, said former employee Charlie Compton. Hambro's Arcata plant was built in 1957 and originally owned by Sierra Pacific Industries, he said.
Compton, who was Hambro's former vice president of marketing and sales, said he started his career in the particleboard industry at the Arcata plant.
"Arcata was probably among the first four or five plants that were built in the United States at the time," he said. "And over the years what's happened in the industry is it's gotten over-produced."
For the past two years there has been a supply and demand imbalance in the particleboard industry, especially on the West Coast, said Pete Malliris, an associate editor for Random Lengths International, who has reported on the industry for 12 years. Resin costs have gone up substantially and other costs such as energy have increased as well.
In addition to flooring, particleboard is used to make countertops, kitchen cabinets, shelving and ready-to-assemble furniture, Malliris said.
"There's just too much of it out there and the market doesn't absorb it," Malliris said. "It's that way nationwide, but more so on the West Coast along the I-5 corridor."
The collapse of the housing market was another blow to the particleboard industry on the West Coast, Compton said. Most manufacturers, including the Arcata plant, supplied material to Southern California, while the Crescent City plant specialized in decking for manufactured homes. At 8 feet wide and up to 27 1/2 feet long, Crescent City supplied some of the largest floor decking panels produced anywhere in the world, Compton said.
At its peak the Crescent City plant shipped 40-45 truckloads a week of floor decking, Compton said. Hambro Group shut the plant down when the number of truckloads dwindled to seven a week, he said.
"We couldn't generate enough cash and enough sales," Compton said. "The manufactured housing market just imploded. It's all just a shell of what it used to be."
Compton said he is optimistic that there will be a market for 8-foot-wide decking again, but another issue Crescent City and Arcata struggles with is shipping difficulties.
Since the closing of its three particleboard plants, Hambro Group has shifted focus to its other companies, which include green recycling, metal recycling and trucking, White said. It also operates a liquid organic fish fertilizer company called Eco-Nutrients and runs the transfer station for Del Norte Solid Waste Management Authority.
"By doing what we're doing, we're actually strengthening the other companies," White said, adding that Hambro Group is determining which of its companies will be its strongest player. "The focus has gone away from particleboard and more toward garbage and transfer station operations and recycling and trucking and fish fertilizer."
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