ANCHORAGE (AP) -- A Kasilof-based wood products company is bouncing back from a fire last May by marketing wood chips and selling pulp logs that are turned into newsprint purchased by Alaska newspapers.
Fire destroyed Kenai Peninsula logger Kevin Gates' sawmill last May. The owner of Gates Construction no longer sells kiln-dried lumber to Anchorage hardware stores, but instead has turned to the export market.
Gates, 49, sells wood chips to a Japanese firm and pulp logs to a Canadian mill that turns them into newsprint bought by several Alaska newspapers, including the Anchorage Daily News, Peninsula Clarion, Homer News, Juneau Empire and Ketchikan Daily News.
Gates is proud that Kenai trees are being used by Alaska businesses.
''It's a very good feeling because it's adding value to the local economy,'' he said.
Fire swept through the Alaska Spruce Products sawmill owned by Gates last May. The building was destroyed but some of the equipment survived, he said. A malfunctioning air compressor sparked the blaze, Gates said.
He plans to sell a pair of dry kilns and a planer because he doesn't plan to get back into the business of sawing lumber until prices improve.
Gates' chipping operation started Oct. 1. His business plan calls for selling up to 200,000 tons of wood chips annually to Marubeni Pulp and Paper Northamerica Inc. over the next three to five years. Marubeni sells the chips to two Japanese mills: Oji Paper Co. and Marusumi Paper Co., Gates said.
Most of the chips come from spruce bark beetle-killed timber cut from Native corporation and other private land on the Kenai Peninsula, Gates said.
He bought the chip facility from a bank a year ago for $2 million after the previous owner, Circle DE Pacific, went bankrupt.
The chips are loaded onto ships at a deep-water dock in Homer. The loading facility consists of a 4-acre concrete pad. Gates Construction employs up to 100 full-time workers and 100 contract loggers and equipment operators, Gates said.
Gates, a Washington state native who has also worked in the timber industry in Montana, moved to Alaska seven years ago as a contract logger. He chose the Kenai because the type of logging and the size of trees were similar to what he was used to in the Lower 48.
Though the Alaska timber industry has suffered one setback after another in the past decade, Gates saw opportunity on the Kenai. Many Native corporations were looking to harvest their beetle-killed timber, he said.
Gates has a 10-year contract with Pacifica Paper, a Canadian newsprint company in Powell River, British Columbia. He sells the mill about 32 million board feet of timber, according to Stan Zuke, Pacifica Paper's general manager of fiber supply.
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