Klukwan plywood plant closing after
67 years

Following a four-month shutdown at its KPly mill in Port Angeles, Wash., village Native corporation Klukwan, Inc. last week laid off salaried employees and announced the mill may be closing.

A recorded message at the plant said closure would depend on the company’s ability to obtain additional financing. The message said an announcement hadn’t been made sooner because the company had been “actively seeking” financing, but had not been able to secure it.

The recording said the company “hopes and expects” the closure would be temporary. However, the company also has told employees they’d be permanently laid off in 60 days. Klukwan, Inc. CEO Tom Crandall didn’t return messages left at his office and residence Tuesday.

The mill has operated since 1941, and has employed “generations of families,” as well as Klukwan, Inc. shareholders, according to its website. It creates several varieties of plywood, including specialty ones overlaid with red cedar and poplar. It produced 50 million square feet of product in 2001.

Klukwan bought the plant in 1989 and has invested $8 million in the operation, including equipment upgrades and environmental improvements, according to the website.

According to stories in the Port Angeles-based Peninsula Daily News, KPly laid off 60 employees, or about one-third of its workers, when it ended its graveyard shift in October 2006.

Company president Shane Hancock told the newspaper that 2007 “looked tough” for the plant, citing prices that had dropped 50 percent during the previous year. “The slumping housing market, foreign competition, and falling plywood prices contributed to this decision,” he said.

The newspaper reported that KPly’s remaining 126 workers have been collecting unemployment since Nov. 2 and that the plant had missed three scheduled re-openings.

Up until three years ago, the plant was the best performer in Klukwan’s portfolio of companies, said board member Ralph Strong. Strong declined further comment except to say that several factors were involved in the closure.

For years, Klukwan was a standout among Alaska-owned companies, reporting total revenues that exceeded $1.3 billion between 1985 and 2003. In 14 of those 19 years, it ranked among Alaska’s 20 most successful businesses, according to Alaska Business Monthly magazine, which ranks companies in the state.

 In 2000, the corporation posted revenues of $75 million, and, with 600 employees, topped even regional Native corporation Sealaska in numbers of jobs.

 But three consecutive years of stock market losses in 2003 cancelled a shareholder dividend for the first time in the company’s 33-year history. Corporation office staff was reduced from 14 to 5, and the office was moved from Juneau to Haines.

Klukwan’s last listing in the business monthly came in 2003, when it ranked 39th in the state with $36 million in revenues. CEO Crandall reported that year that he expected Chilkat Cruises and Tours to make its first profit, and reported that KPly and explosives distributor Atlas-Alaska, Inc. were doing well despite a downturn in the national economy. Klukwan has since sold Atlas-Alaska.

The company issued a dividend last year, shareholders said.