AHF Products, parent company of 14 hard surface brands and the largest hardwood flooring manufacturer in the U.S. by volume, continues its acquisition spree. But it’s not another brand the company is adding to its growing stable; rather, it recently entered into an agreement to acquire two West Virginia sawmills that had abruptly shut their doors in late February.
Under the agreement, AHF Products will acquire assets related to Allegheny Wood Products’ (AWP) sawmills in Smoot, Greenbrier County, and Norton, Randolph County. According to AHF executives, the acquisition will augment the supply of lumber to the company’s solid wood flooring manufacturing facility in Beverly, W. Va., the plant that produces solid wood under the Bruce, Hartco, Robbins and Capella brands.
“The purchase of these two sawmills is a wonderful and smart investment,” said Brian Carson, AHF president and CEO. “It helps ensure lumber supply for our Beverly, W. Va., plant and it is essential to our customers and employees who rely on our supply of hardwood flooring.”
More broadly, the local community in particular stands to benefit from the deal. AHF Products will be saving approximately 80 direct jobs at the two mills. The acquisition by AHF Products is also expected to create approximately twice that number of jobs with new positions expected to open for loggers, truckers and suppliers in the region. Multiple published reports said AWP, a 50-year-old hardwood operation, eliminated as many as 850 full-time and outside contractors when it closed its doors on Feb. 23. AWP, based in Grant County, operated a number of locations around the state, including the city of Kingwood, where its largest mill is located. The company has an operation including its headquarters in an industrial park near Petersburg and a fumigation facility in Moorefield.
AHF Products research shows the supply of Eastern hardwood lumber in the U.S. is currently 65% of what it was pre-pandemic and 40% of what it was before 2007. The purchase of the two sawmills recovers 100% of the lumber supply AHF Products would have lost due to the closure of AWP and secures a consistent lumber supply to protect AHF Products’ customers. AHF estimates these two mills combined will supply 25 million board feet annually.
“These sawmills assure AHF Products’ direct access to a high-quality timber supply, which will provide more than 20% of the required supply at full capacity of flooring production,” said Jake Loftis, COO, AHF Products. “AWP was 12% of total supply at peak, so we have more than replaced the lost supply. We are excited to add this capability to AHF and operate the mills at a capacity that will positively impact people and these two communities. It’s another key step to ensure AHF’s future success.”
Emphasis on the word “future.” Not only does the acquisition of the sawmills satisfy current demand, but it also positions AHF Products for what the company predicts will be a strong pull in the not-too-distant future. As Carson put it: “When the market turns back, which I think it will, I don’t think there’s going to be enough lumber to go around. By vertically integrating the sawmills in our operation, we’re going to be producing for ourselves to feed the plant. So, we’re voting with our wallet that the market is starting to get better. We’re taking steps to get deeper into solids, because we think the raw materials may be undersupplied in general.”
The well-documented challenge with hardwood production requires a delicate balancing act of knowing when and how much lumber needs to be treated and processed to meet any anticipated demand. Given the amount of time it takes, for example, for raw-cut lumber to dry on the yard and in the kilns, it can be a six-month cycle from when you acquire it to when you turn it into flooring, according to Brian Parker, vice president of product management, AHF Products. To that end, timing is key. “You might not see that impact on the market here immediately, but it is coming,” he said. “With the acquisition of the sawmills we’ve positioned ourselves well in preparation for that.”
The purchase price of the sawmills was not disclosed.
