Wyoming company buying Spearfish sawmill

By Dan Daly, Journal staff | Thursday, January 10, 2008

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SPEARFISH -- Neiman Enterprises, the Hulett, Wyo., company that operates two of the Black Hills' largest sawmills, will add the Pope & Talbot sawmill in Spearfish to its operations.

At a press conference Wednesday in Spearfish, Neiman announced it has reached a deal to buy the Spearfish sawmill.

It will be a three-way transaction involving Pope & Talbot, based in Oregon, and International Forest Products, a Canadian firm known as Interfor. The deal should close late in the first quarter of 2008.

In November, the Spearfish mills' financially troubled parent company announced it was selling three sawmills, including the Spearfish plant, to Canada-based Interfor, for about $69 million.

But Interfor only wanted the other two mills, so it struck a side deal to sell the Spearfish mill to Neiman. According to a Reuters report, the price of the Spearfish mill was $14 million.

The Spearfish mill employs 280 people directly and another 150 contract loggers. Crews bring in logs from as far away as Chadron, Neb., and Broadus, Mont.

"I can't begin to say how blessed and how excited we are to be given the opportunity to take over this operation," said Jim D. Neiman, vice president and chief executive officer of Neiman Enterprises.

Neiman Enterprises is a major player in the Black Hills sawmill business. Its other large mills are in Hulett and Hill City.

Jim Neiman is a third-generation member of the Neiman family in the lumber business. His grandfather started in 1936, operating a portable sawmill near Hells Canyon in Custer.

The family later moved to Hulett, and 10 years ago, bought the Hill City sawmill. Its businesses include Devils Tower Forest Products, Rushmore Forest Products, Neiman Timber Co., Mountain West Millworks, Neiman 77 Ranches and the Devils Tower Golf Club.

With the purchase of the Spearfish mill, Neiman Enterprises will be the only major player in the Black Hills.

There are smaller mills scattered throughout the Hills, but the Hill City, Hulett and Spearfish sawmills are the only large-scale lumber producers in the Black Hills.

Tom Shaffer, Neiman's general manager and chief operating officer, said the consolidation will help the Black Hills timber industry achieve cost savings in an increasingly competitive industry.

Currently, logging trucks haul logs from Nebraska and the Southern Hills to the Pope & Talbot mill in Spearfish, and other logging trucks haul logs from Montana to the Neiman mill in Hill City.

With the price of diesel fuel soaring, the company will save a great deal of money by hauling logs to the nearest of the three sawmills, Shaffer said.

Should the industry be concerned that Neiman Enterprises is going to be the only show in town?

Jim Neiman said these days, with sawmills across the West closing and consolidating, a lot of national forests have only one sawmill.

"You have about one sawmill per forest," he said. "We have three operations but one owner. ... This gives us a chance to be competitive down the road, with wages and investment in sawmills."

And being competitive is increasingly important in a tough global lumber market. Today, Neiman said, he spends more time watching currency exchange rates than mortgage rates or U.S. housing starts.

"Our real competition is global," Neiman said.

Neiman also made a pitch for Forest Service policy in the Black Hills National Forest to continue allowing enough timber sales to keep the industry viable.

"We have a healthy forest because it's been managed," he said.

Federal policies governing the Black Hills National Forest have been a political battleground for decades. The current forest plan allows 90 million board feet to 100 million board feet of timber to be harvested per year.

If it were less, Neiman said his company would probably not be buying the Spearfish sawmill.

Contact Dan Daly at 394-8421 or dan.daly@rapidcityjournal.com