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Grays Harbor Paper – Sustainability as a Survival Strategy

By on August 25th, 2009

(Click here to view the virtual tour of Grays Harbor Paper)

The “Greenest Paper Mill in the United States” did not plan to achieve that status. It took Grays Harbor Paper more than 10 years to build a solid basis for its “triple bottom” line: people, paper, planet.

In the late 1980s federal legislation had already begun to slow logging on the Olympic Peninsula, when the northern spotted owl was named as a threatened species in 1991. As a result, logging on public and private lands was cut back in an effort to protect old-growth forests, the owl’s habitat. And to logging towns in the area, with no other real industries, the changes were devastating.

Hoquiam, a town of fewer than 9000 residents on the coast of Washington, took a particularly hard hit when in 1992 the local pulp and paper mill was closed. The mill, built in 1929 and operated by ITT Rayonier and Hammermill Paper, was the city’s largest employer. It’s closure put 626 people out of work.

Grays Harbor Paper MillAs unemployment topped 20% and teen pregnancy and suicides skyrocketed, the community rallied to offer an alternative to the government’s offer to train the mill workers to be punch card operators. As a result a consortium of more than 40 local investors and friends, lead by Bill Quigg and his family, third generation residents of the community, contributed to buy the mill in 1993 and put 250 people back to work.

Grays Harbor Paper, the new name for the old mill, manufactured paper under the Weyerhauser name until around 2000, when it began producing paper under its own label. Grays Harbor Paper’s revenues are around $100 million; just about 1.5% of the domestic paper market.

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From Forest to Farm

Competition with deep pockets and very little access to additional capital for improvements meant that Grays Harbor Paper had to identify strategies that would cut costs and expand product offerings. The company’s original survival strategy was to increase sales, save money, and not pollute.

Bio-mass As a first step, the company took a close look at their power costs. Paper mills use a lot of electricity and the choice is to buy it or make it. A boiler system was already in place to heat the paper machine rollers that dry the paper. Converting the boilers to a fuel system that burns “non-merchantable” wood waste (bio-mass) and drives three turbine generators meant that Grays Harbor Paper could power their operation without buying fuel oil or natural gas.

The turbines are owned by the local public utility and can produce 17 megawatts of electricity. Any green power not needed by Grays Harbor Paper is transferred to Puget Sound Energy and these renewable energy credits are sold for “fossil fuel free” electricity.

Gray Lime Drying PondsAccording to mill management, burning wood does not add incremental CO2 into the atmosphere. Controlling the burn process and scrubbing the smoke with water has cut emissions to almost nothing. Naturally decaying wood releasing CO2 has made the whole process carbon neutral.

To close the loop, the industrial waste that Grays Harbor Paper calls “grey lime” – ash from the boilers, calcium carbonate (a filler in paper), and wood fibers too short to use – is routed to drying basins. When the grey lime has dried, it is trucked to a local farm and applied as an amendment to “sweeten” acid soils.

The People Element

A study completed in 1993 by Simmons Consulting for the Grays Harbor Economic Development Council found that the paper mill would be viable business concern if:

  • Employees were willing to establish a different work culture, including the trading of wages for equity
  • The business produced an attractive return for employees and investors
  • The marketplace welcomed a quality, service-oriented, regional paper producer
  • No significant environmental concerns were found

Grays Harbor County is one of the most depressed areas in the state; unemployment is nearly double that of the State of Washington. More than 25% of Grays Harbor residents do not graduate from high school and only 12% have either a 2 year or 4 year college degree; compared to Olympia Washington (just over 50 miles away) where 92% graduate from high school and 32% have either a 2 year or 4 year college degree.

The union-run company has a very different work culture from most “mainstream” mills. Employees that have the feeling that they are an integral part of the company make it possible for Grays Harbor Paper to compete.

Integration of a team concept, new electronic monitoring, and responsive management have made it possible to keep the plant running at full capacity with limited supervisory positions. The employees work on self-directed teams, they have voted on work schedules, and quality standards are set – and met – by the entire organization.

It is clear that the mill team members benefit from steady work and good wages, in return the mill provides other services for the employees.

A new “Employee Maintenance Center” has just opened inside the plant, offering the services of a full-time physical therapist and access to exercise equipment during regular work shifts. Team members are welcome to use the service whether they were injured at work or at home.

The most common injuries in the mill are from excessive lifting, pushing, pulling, holding, or throwing; in other words, minor injuries that can contribute to more serious back or other debilitating injuries. By providing preventative therapies, the Employee Maintenance Center reduces the risks of workplace strains and sprains.

New “Green” Products

Moving Rolls of PaperThe road from being a traditional paper mill to the “Greenest Paper Mill in the United States” has been a long one and, until recently, not a very profitable one.

Sixteen years ago, Grays Harbor Paper took over the mill, ten years ago business was flat and costs were spiraling. It was a time of reckoning and the key question was: How to turn the mill into a profitable company? Five years ago, the company defined a new strategy: to manufacture high quality recycled paper containing 100% post consumer fibers produced with renewable energy.

In 2005, only about 2% of the paper Grays Harbor produced contained recycled content. Today well over half of the paper produced in the mill contains recycled content, and 20% of all paper sold is manufactured from 100% post consumer waste.

In May 2009, the State of Washington passed legislation to transition all of its copy and printing paper to paper made from 100% post consumer waste, contributing to the continued growth of demand for recycled office and printing paper. The State’s new paper policy also mandates that state agencies cut their paper use by 20%, not only confirming that recycling is important, but that the conservation of resources and materials is just as important.

Adopting a regional mindset and working within a 200-mile bubble, Grays Harbor Paper sources almost all its inputs and sells 40% of its paper within about 200 miles. More than 98% of all sales are made to companies on the west coast, from Vancouver BC to San Diego CA.

Water comes from a rainwater reservoir 15 miles away and wooden pallets are made 12 miles away from local wood. Bio-mass for the boilers is collected within a 30 mile radius; and mixed, virgin, and 100% recycled pulp come from mills in Halsey OR, about 200 miles away.

Closing the loop in Grays Harbor county, Grays Harbor Paper has taken a leading roll in Building a Sustainable Grays Harbor, a group of 75 local businesses that have developed Grays Harbor 2020, a strategic plan to create and promote a local sustainable economy.

Teaming with Paneltech International, a nearby company, Grays Harbor Paper supplies 100% recycled paper as the raw material for PaperStone, an alternative to wood, marble, or synthetic stone. The paper is soaked with a plant-based resin, compressed and heated to make the finished product.

Another green partner is Ocean Gold Seafoods, based in Westport. Ocean Protein, a sister company of Ocean Gold located in Hoquaim, sends its wastewater to Grays Harbor Paper where it is treated in secondary treatment ponds left by the demolished pulp mill on the 90-acre site. Wastewater solids are dried and used as fertilizer on a local farm, keeping them from the landfill.

The Grays Harbor 2020 plan includes strategies to “Identify, position for, and recruit green businesses that suit Grays Harbor’s competitive advantages.” Relationships like those between Paneltech, Ocean Gold, and Grays Harbor Paper are the kinds of relationships the community is looking to replicate.

The Right Thing to Do

David Quigg, Director of MarketingDavid Quigg, Director of Marketing for Grays Harbor Paper, says “If we can make this happen here, there are mills like ours that have closed all over the country and they can do it. We are turning blue-collar jobs into green collar jobs. We’re doing this to make money and to do the right thing for our community. We’re not all Ivy League graduates; we’re doing this because it is what we should be doing.”

Learn more about Grays Harbor Paper from David Quigg in these WhatTheyThink videos:

  1. One Response to “Grays Harbor Paper – Sustainability as a Survival Strategy”

  2. By Pete on Aug 26, 2009 | Reply

    Washington Unemployment Situation in Heat Map form:
    here is a map of Washington Unemployment in June 2009 (BLS data)
    http://www.localetrends.com/st/wa_washington_unemployment.php?MAP_TYPE=curr_ue