Release No. 0240.97
USDA BACKS NEW SAWMILL FOR ECONOMICALLY DISTRESSED REGION OF ALASKA

                                                   Jim Petterson (202) 720-4623
                                                            jpetterson@usda.gov
                                                    Dan Campbell (202) 720-6483
                                                                               
 

USDA BACKS NEW SAWMILL FOR ECONOMICALLY DISTRESSED REGION OF ALASKA

     WASHINGTON, July 18, 1997 --Agriculture Secretary Dan Glickman today announced that the
U.S. Department of Agriculture (USDA) will guarantee a $2.58 million loan to build a new sawmill
on Gravina Island in Ketchikan, Alaska. The project will create 40 new jobs in an area of high
unemployment and will serve as the lynchpin of a new, timber-oriented industrial park.

     "This project will provide a major boost to one of the most economically distressed areas
of Alaska," Glickman said. "Supporting new,  job-creating industry in this manner is a
cornerstone of the rural development policy of the Clinton Administration and USDA."

     Project planners hope future tenants of the industrial park will include a furniture
manufacturing plant and a processing facility which will turn waste bark into garden compost. 

     Most timber harvested in Alaska is exported as unfinished logs. Thus, most "value-added"
dollars derived from further processing of the state's timber resources are also shipped out of
state. The sawmill, to be owned and operated by Seley Log & Lumber Ltd. of Ketchikan, will be
one of the few in Alaska that cuts logs into boards. Plans call for the addition of a lumber
kiln-drying operation in the next phase of expansion.  The timber volume needed to supply the
Seley sawmill and other small businesses in Southeast Alaska was provided for in the Tongass
Land Management Plan released last May.  No additional timber volume will be required for the
new facility. 

     "This is an exciting project because it points in the direction we in Alaska need to be
heading if we are to become more than simply a raw product supplier and instead become a
producer of value-added products," said Ernest Brannon, state director for USDA Rural
Development in Alaska. "Tenants of this industrial park will support each other -- the sawmill
will provide lumber for the furniture plant and the compost processor will recycle the wastes
from the other operations."  

     The project is being made possible through a combined effort of USDA, the National Bank of
Alaska and the Ketchikan Gateway Borough.

      USDA's Business & Industry Guaranteed Loan program helps create jobs and stimulates rural
economies by providing financial backing for rural businesses.  This program guarantees up to 80
percent of a loan made by a commercial lender.  Loan proceeds may be used for working capital,
machinery and equipment, buildings and real estate and certain types of debt refinancing.  

                                        
     Business and industrial loans can be guaranteed in rural areas and cities up to 50,000
population.  Priority is given to applications for loans in rural communities of 25,000 or less. 
Any legal entity, including individuals, public and private organizations and federally
recognized Indian tribal groups, may borrow.
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