Neiman Enterprises Buys Spearfish South Dakota Sawmill, Doubles Size

2006 Bravo Regional Award winner Neiman Enterprises Inc. has purchased a sawmill in Spearfish S.D. from Pope & Talbot Inc., more than doubling the size of the company. First Interstate Bank, Jonah Bank, and Farm Credit Services of America helped Neiman Enterprises tackle the acquisition.

According to Neiman Enterprises President, Jim Neiman, This is a pretty huge expansion for us. Were adding more than 270 employees in the new facility, plus about 150 indirect workers tied to logging and trucking. Were gaining a complete sawmill, dry kiln, and planer plus a 45,000-ton a year pellet operation with it.

The wood pellet operation represents Neimans first venture in the renewable energy industry. The pellet company will be operating under the brand Heartland Pellets, with Casper, Cheyenne, and Riverton as three of the biggest markets.

Sales and marketing for the new company will remain at Neiman headquarters in Hulett, Neiman said.

Hard times in the lumber industry, with the worst lumber market in 35 years, led to opportunity for Neiman. If our goal was to buy at the bottom of the market, we accomplished it, he said. Its a very brutal market right now. About 35 percent of the timber industry is shut down. Opportunities like this only come along at very distressed situations. We were blessed to be able to step in when this company went into bankruptcy.

The company, Pope & Talbot, is a piece of lumber industry history. Founded in 1849 as their first sawmill in Oregon, the company started building wooden ships. It was one of the original companies to be traded on the New York Stock Exchange, and was an early member of the Fortune 500, Neiman said. It was 158 years old and still had family members in the company. It filed for bankruptcy last fall. Weve been working on the deal for six months.

While Neiman admits that it was sad to see a lumber business with such history fail, he is glad to be able to make use of the opportunity and put the Spearfish sawmill back in operation. The deal closed on Wednesday of this week, by next Monday he expects the mill to be up and running.

Despite the rough seas the timber industry is experiencing right now, Neiman Enterprises Inc. seems to have figured out how to surf the waves instead of being swamped by them. The company has found a niche market for its high quality Ponderosa pine products by selling primarily to window manufacturers like Pella, Anderson and Marvin. In addition it has diversified by expanding bedding products for large and small animals, and wood pellets for heat. The company also owns The Golf Club at Devils Tower, named one of Golf Digests top 10 new public golf courses last December, before becoming a member-owned club.

Not content to stop there, Jim Neiman is also exploring the potential for using wood biomass as a renewable energy source beyond wood pellets. Hes been talking with representatives of four different regional power companies about co-generation of electrical power and creating ethanol out of wood waste and forest biomass.

Its tough times right now in the lumber industry, Neiman admitted, but once you get through the storm, theres better weather in front of you. In this business, the tougher it gets, the better its going to be in the future.Timber BuySell