Risk & Business Magazine F.A. Peabody Insurance Fall 2016 | Page 7

Maine’s Forestry Industry Insights From Bob Dorsey B Bob Dorsey ob Dorsey is President & CEO of the Aroostook Partnership, AP, a public/private partnership headquartered in Caribou, Maine that includes over 100 participating businesses. Because of its incredible importance to the economy of Northern Maine, AP originated a ‘forestry cluster’ group in 2014 which addresses challenges and opportunities in the forestry industry. Dorsey believes one of the challenges facing the industry, which accounts for 8 billion dollars annually and over 14% of the Maine economy, is an aging workforce given the average age of 57. He is striving to change that by working with high schools, guidance counselors, holding business/ teacher meetings and promoting job shadowing programs in an effort to educate the youth of the job opportunities available in the woods industry. Bob believes that Maine’s forestry industry is not dying but changing. Though the demand for traditional newsprint and other print paper is waning, the demand for container board and specialty paper products is steadily increasing. He views more value added niche products such a metallized paper for potato chip bags produced by Twin Rivers or cardboard used for online sales deliveries as areas for growth. Twin Rivers is investing $12M to upgrade a paper machine and two new tissue manufacturing machines are being installed at the Baileyville plant as proof that new fiber markets can be developed. Bob also sees great promise in several emerging technologies such as nanofiber and biofuel products. The University of Maine has been doing excellent research into further uses of forest resources and several products have great market potential. Dorsey strongly believes there are several areas that need to be addressed in the State of Maine for our woods industry and other Maine industry’s to again thrive, including: new products and product diversification, changes in state regulatory policy, energy costs in Maine and better broadband access. All this adds up to a better overall business environment for Maine. + Scott Austin is an agent specializing in forestry and commercial insurance. Scott is a Certified Insurance Counselor. Maine’s Forestry Industry Insights From Scott Madden S Scott Madden cott Madden was cutting wood with his father as soon as he could lift a chain saw. He bought his first piece of equipment at age 17 and started as an entry-level employee operating the cable skidder. He has been in the business for 39 years and is now the owner of Madden Timberlands, Inc. He operates a wood yard in Passadumkeag, Maine. High grade hardwood is trucked in and processed from approximately one million acres from Maine and New Hampshire. This land is managed by American Forest Management and is part of the former International Paper, Diamond International and Champion International. In 2014 Scott operated 4 harvesters, 4 delimbers, 5 grapple skidders and had 38 employees. However, the loss of markets for the paper mills and other facilities forced him to downsize. Today he is running 2 harvesters, 3 delimbers, and 4 grapple skidders with only 21 employees. In the early years, mechanical harvesting in Maine was traditionally softwood centered but then shifted to hardwood. Scott believes hardwood had become cheaper because the technology to use softwood was not sufficiently advanced to be efficient. However, he believes the trend is switching back to softwood due to the increased need for pellet and future cardboard plants, and other low end, less valued products other than paper. An industry trend that Scott and others have noticed is the move to smaller more specialized mills and other facilities as many companies are being forced to downsize. Scott states “the logging industry is overtaxed, underutilized, and overregulated, but not dying.” The industry is currently going through a “rebuilding stage”. + BY: SCOTT AUSTIN, CIC, F. A. PEABODY INSURANCE FALL 2016 | 7