DAYTON, Washington (From news reports) -- The majority of operations at Columbia Pulp LLC will shut down for an undetermined length of time starting Friday, Feb. 18, while the young company works on developing a market for its unique product.

Approximately 80 employees will be out of work, with a small staff continuing to handle daily business operations, though the company's interim CEO states this does not mean the pulp mill is going out of business.

"The idling of a plant doesn't mean that we're not continuing to develop the technology," said Terry Ryan.

Columbia Pulp is responsible for the first modern technology tree-free pulp mill in North America, recycling local agricultural waste into an alternative fiber that can be used by paper- and packaging-product manufacturers as a substitute for wood.

But in pioneering a new industry, the customer base for Columbia Pulp has developed slowly -- and not enough to maintain full operations, according to its leaders.

"The pausing, if you will, is to come back in full production mode once we decide what the future of the company is going to be," said the company's interim CEO.

No reopening date has been set for the Columbia Pulp plant at Lyons Ferry.

Columbia Pulp is providing people losing their jobs with support "in terms of transition and assistance," according to company leaders.

Sections of the plant could resume activity, Columbia Pulp Vice President of Operations Kyler Lovgren explained, but that is not in the forecast right now.

"Being a first of its kind application with this type of technology has not been without challenges," Ryan stated in the announcement.

"And while this is normal for a company at the forefront in developing a product like this, to continue on we must make these hard choices while we evaluate our options going forward."

Columbia Pulp was founded more than a decade ago with a vision of making a business out of sustainable practices.

The 140,000-square-foot mill at Lyons Ferry, however, didn't begin operating until September 2019. It was functioning barely six months before being forced to close due to pandemic restrictions. The plant reopened in June 2021.

The project was granted its building permit from Columbia County in June 2016 and $134 million in tax-exempt municipal solid-waste bonds from the Washington Economic Development Finance Authority was authorized in 2015.

Columbia Pulp also received $20 million in New Markets Tax Credit financing, which provides incentives for community development and economic growth through the use of tax credits that attract private investment to distressed communities.

Columbia Pulp was designed to process more than 250,000 tons of straw left over from harvest each year, spending more than $15 million to purchase it from local farmers and eliminate the need for them to burn it.

But while Columbia Pulp states its operations improve regional air quality with carbon emissions reduced by 76% compared a traditional pulp mill, there comes growing pains with a pioneering enterprise.

"The revenue levels are dependent on us developing new grades of material. That is the main challenge with this project," Ryan said.

"It's not a traditional poor-revenue story because that indicates a downturn in an existing business. This business is a business that is developing a product with a market. That's the challenge."

The decision to idle Columbia Pulp for now comes amid "technological challenges in the face of a slower customer adoption time frame," said Ryan.

"We're not necessarily streamlining; we're utilizing our resources to really develop a new product. It's a challenge training people, developing new processes like times and temperatures and utilizing a new material to develop a new product with the customer base at an acceptable level."

Staying in business
Ryan clarified that Columbia Pulp is not in danger of going out of business.

"We really want to and we will be continuing this work," he said. "That's what we're explaining to our customers. There's not a production-level of staff here, but there will be on-going staff while we continue to do this development.

Ryan admitted revenue has not yet been enough to offset Columbia Pulp's operational expenses, but this idling period is intended to put them in better position to see profits, he said.

"It's not an existing product line," he explained. "We're developing this product line, so there isn't a sustainable level of production until we develop the technology further with our customers. That's something that takes a lot of time."

Ryan feels Columbia Pulp will come out of this stronger.

"There's a lot of interest," he said. "There's a lot of trails going on. There's a lot material discussion in terms of the grades that we've developed. I think all of that's very positive for the future, but that future goes out years from now. This is what it takes to develop some of these grades.

"There's a lot of good things happening; unfortunately, it's just not yet done at a level where we can keep 80 people here."

But with other difficulties in involves labor, process and equipment, Lovgren explained, the decision was been to pause production and focus instead on customer trials and grade development projects without a full operating staff.

"We made this very difficult decision while continuing to evaluate our strategic options," Ryan said. "We are acutely aware that this has wide-reaching impacts on many people -- our valued employees and their families, farm suppliers, and the communities in which we operate.

"The Columbia Pulp team is talented and dedicated, and we are committed to assisting them through this transition."