Demand swamping SmartLam production
The Columbia Falls City Council agreed last week to go to bat one more time for SmartLam, the high-tech wood manufacturing business that set up shop at Western Building Center last year.
Last year, the city and Flathead County each applied for a $400,000 economic development block grant from the Montana Department of Commerce to help SmartLam purchase production equipment from Germany. But Gov. Brian Schweitzer diverted the $800,000 to areas in eastern Montana impacted by the Bakken oil-patch boom. On March 18, the council unanimously agreed by resolution to apply again for the grant.
Demand for SmartLam’s cross-laminated panels far exceeds production, general manager Casey Malmquist told the council during a public hearing. The panels are used for “rig mats” in the petroleum industry, including gas pipeline work in swampy parts of southeast Texas and tundra areas in Alaska. If the Keystone XL pipeline project is approved, demand will soar again, he noted.
“We don’t get any small orders,” he said. “Orders can be for 5,000 panels at a time.”
SmartLam invested $2 million in production equipment last year. The company takes lower quality lumber from local timber mills and uses finger-jointing and planing equipment to create 2-by-4s, 2-by-6s or even 2-by-8s that are glued together to create panels up to 11 feet wide and 40 feet long.
The bottleneck in the production process is the giant hydraulic press, Malmquist said. The rest of the equipment can outstrip the press by a 4-to-1 ratio. A new press could help double production, creating 32 new jobs at SmartLam within two years.
The 355,000 board-feet of larch and fir lumber purchased from local timber mills after the new press is in operation will help create and strengthen jobs elsewhere in the local economy. Malmquist also said SmartLam wants to have the second press designed and built here in the Flathead, creating even more jobs.
As an economic development block grant, the $400,000 would go into a revolving loan program after it’s paid back by SmartLam, explained Tina Oliphant, vice president for finance at Montana West Economic Development. MWED assisted in the grant process by conducting an in-depth credit review of SmartLam.
The $400,000 can then be loaned back out to promote further local economic development, Oliphant said. Columbia Falls has accumulated $625,000 in its revolving loan program since 2003. With loans currently out to three businesses, about $290,000 remains available. Flathead County’s program has nearly $2 million, Oliphant said.
Three people spoke in favor of the grant application at the city council’s public hearing — city resident Ed Smith, Columbia Falls Area Chamber of Commerce executive director Carol Pike, and Paul McKenzie, the lands and resource manager at F.H. Stoltze Land & Lumber Co. Stoltze could be a major supplier of lumber to SmartLam. Sen. Dee Brown, R-Coram, also sent a letter in support of the grant application.