By Donna Clapp
From the March/April 2019 Issue
“Indiana is renowned for producing high quality hardwood timber, yet more than $230 million of sawmill products are coming from outside the state,” said Lt. Governor Suzanne Crouch. “With demand there and our robust, sustainable forest resource base, we want to provide that supply chain link and help capture some of that economic activity in Indiana.”
Crouch made that statement at the Indiana Hardwood Lumbermen’s Association’s annual convention in February, officially unveiling the new Indiana Hardwood Strategy, aimed at expanding and attracting new hardwood processing facilities to Indiana.
According to a recent study, the hardwoods industry contributes more than $10 billion to the state’s economy and supports over 70,000 high-wage jobs. The value of Indiana’s hardwood exports totaled over $250 million in 2017, with the state’s top two export markets in this industry being China and Canada. Exports of both lumber and wood-based products such as wood veneers and paperboard products has increased in the past decade. On top of that, the wood industry is supported by many other types of companies, such that for every dollar invested in a finished wood product, an additional 80 cents is generated by companies that support the production process. The study also showed that the industry supports job growth in many other industry sectors so for every 10 jobs directly related to hardwoods an additional eight jobs are supported.
“I was really happy to see that the study shed a light on Southern Indiana to recognize the value of this region for the state’s economy and the importance of the hardwoods in terms of the area’s economic impact,” said Joseph Henson, CEO of the Dubois Rural Electric Cooperative (REC), a member of Hoosier Energy, a generation and transmission cooperative.
“I feel that the study recognized the potential of the furniture industry in the region, and even the expansion of opportunities for economic development that the hardwood supply would bring to a company that is looking to invest,” continued Henson. “The study shows the potential that is here, so these industries can maximize and use that data to forecast out into the future when they go to make a potential sale of their material or product, so they can do it with confidence now, because this report shows what the future may bring.”
Current industry leaders are excited by the news as well. Hank Menke, CEO of OFS, a well-known furniture manufacturer, whose headquarters is located in Huntingburg, IN in the heart of Dubois County, is proud of the long history his company has in the region, and is poised to expand his base of operations there.
“One reason we are located in the region is the hardwoods that are located here, and there are a lot of industries in our region that are there for that reason. We’ve got walnut, oak, both white oak and red oak, and tulip poplar, which is our state tree, and those are our main hardwoods in the region,” says Menke. “I’m very proud of the fact that OFS is 85-years-old this year, which is really unusual in wood manufacturing. We have always been a family-owned company. All four of my children are involved, which is the fourth generation on my father’s side, and sixth generation on my mother’s side in the wood working industry. But to have a fourth generation business is really unique, it’s probably one tenth of one percent of family businesses that are still going on into the fourth generation. It’s pretty amazing to be such an important part of Huntingburg and Dubois County for such a long time. We weathered all the downturns and today we are doing really well.”
EXPANDING IN HUNTINGBURG, IN
OFS has several locations around the country, but their current expansion project is in Huntingburg, IN, where it all began. With 20 percent growth last year and 27 percent growth this year already, OFS is looking to expand their warehousing operations to keep up with demand for their products. “We’ve got a plan for expansions worth almost $30 million in the next three years,” says Menke. “We are planning to reinvest that money in Dubois County specifically.”
The Dubois REC is turning 80 this year and Menke said it has been with them throughout all of their growth phases, giving great advice on energy savings, as well as incentives for expansions.
“The rural electric co-ops came about because there was no way to get electricity to rural communities,” explained Henson. “So co-op were formed to provide electricity at the best possible cost, and that’s still our goal today. But it’s not just that, we are a very important part of our community, not just because we provide electricity, but also because of our involvement with the community’s economic developments.”
Menke said that Dubois REC is a key part of the infrastructure in terms of having the electric energy to be able to drive what the company does. He added that they have been very willing to expand the utilities where ever they needed to go to meet any demand.
Henson outlined several ways Dubois REC helps corporations in the region.
“If they have an expansion or a modification that requires more electrical capacity, we will work with them to meet their needs as quickly as possible.” said Henson. “We help OFS be sure they are keeping their plant running as efficiently as possible, making sure nothing is wrong with their capacitor bank or any part of their system. We help them control their costs as best we can and in a number of ways. Within the interior of the manufacturing facility, we offer rebates for putting in LED lighting.”
In return, OFS has its intention on not just expanding their own business, but also helping economic growth and community growth in their region as well. The Menke family has been very involved in the Huntingburg community from the beginning, building a community center and starting an incubator to help our local entrepreneurs,” said Menke.
Menke recently raised $3.3 million in private funding to get the first environmental studies done to expand the interstate road system in the county to have better logistical access North and South of the county.
“A North/South interstate road through our county would open us up to Orange County which is just North of us and has the highest unemployment rate in the state. People from that county would be able to take jobs in Dubois more easily if they had a better way to get here, and that would help us with our labor here,” Menke explained. “It also would make a huge difference for the other big businesses in the area like Master Brands, Kimball, Meyer Distributing, and Jasper Engines.”
OFS’ environmental stewardship is expressed through it sustainable forestry efforts. Indiana has one of the strongest programs in the nation for sustainability of forest management. Lt. Governor Crouch said Indiana has approximately 4.9 million acres of forestland, of which, 84 percent is privately owned, 8 percent is owned by state and local government and 7.5 percent is owned by the federal government. The total acreage of timberland in the state has steadily increased since the 1960s, and forests are currently growing in volume more than 3.3 times the amount being removed annually.
This bodes well for the future growth of the hardwoods industry in the state, and state officials are looking to use hardwoods industry assessment and economic development strategy to strengthen the industry as well. Some of the specific initiatives include strengthening Indiana’s existing hardwoods industry by expanding current processing, attracting new companies to the state, educating consumers and businesses on the sustainability of the hardwoods industry, reducing leakages and developing an ongoing campaign to promote the value of hardwoods.