The business of thinning

New Mexico lands are in dire need of tree-thinning,
and local companies looking to branch out are
more than happy to provide the service

By Sue Vorenberg
Tribune Reporter

There’s an upside to the critically unhealthy state of
New Mexico’s forests: It’s created a budding new
industry.

Tiny contracting companies, most of them created by
former firefighters, are sprouting up all over the state
to help homeowners, towns and even the Forest
Service thin wooded areas that have become
dramatically overgrown. And with about 7 million
acres in need of thinning to help prevent fires, it looks
like they’ll be in business for quite some time.

"The job security is there," said Daniel Monta§o, a
former firefighter and co-owner of SWISCO, a
contractor in Albuquerque’s East Mountains. "Once
we finish one project, the Forestry Division has
another one lined up for us. There’s a waiting list of
about 250 people, and we’re just in the very early
stages. There’s so much work to be done. This can
be a very lucrative business."

The pay is good, with business owners bringing in
anywhere from $30,000 to $70,000 a year. And many
are hiring workers at an average of $10 an hour to
help with the vast amount of work out there, Monta§o
said.

"There’s a real urgency to have this done with the
fires this year," said Randall Engler, another former
firefighter and owner of A&R Thinning and Removal
Services, also in the East Mountains.

The East Mountain area has the most small
contractors, with about 10 one- to five-person
companies, said Kevin Robinson, an assistant editor
with New Mexico State University’s agricultural
communications department.

"Five or six of those are entirely new startup
companies," Robinson said. "And there are a lot
more sprouting up in areas like Ruidoso, Capitan
and Red River. I’d say there’s probably 1,000 people
working in this industry across the state."

Efforts to deal with overgrown forests – some have 30
to 50 times more trees than is considered healthy –
are just getting underway. The state Forestry Division
and U.S. Forest Service, partnering with
communities, started a program last year that pays
for 70 percent of the thinning where towns border on
wilderness areas.

"I was fighting fires with the Forestry Division in
October and heard about the program’s request for
proposals," Engler said. "My partner and I put in a bid
and we got a contract for 10 properties. It’s taken off
from there."

Some cities, such as Ruidoso, have mandated that
homeowners thin trees around their property to
protect themselves, and their neighbors, from fire.
Others are leaving it up to residents, but if disastrous
fires continue, more towns might follow in Ruidoso’s
footsteps, said Marlon Johnson, assistant director of
forest management at the Forest Service’s
Albuquerque office.

The Forest Service, besides helping homeowners
thin their properties, also hires contractors to help
thin national forests. It has an annual budget of $15.7
million in New Mexico to thin trees and is mostly
working in areas near towns, Johnson said.

Last year it thinned about 100,000 acres, much of it
with the help of small contracting companies. This
year it will probably thin about the same amount. But
with 7 million acres in need of thinning, there’s lots of
work available, Johnson said.

"There are a lot of small contracting companies
getting started, but there really aren’t many bigger
companies that can treat several hundred acres at a
time," he said.

Even a small technology company in Mountainair has
found a way to get in on the forest cleanup economy.
The 16-person P&M Signs takes removed material
and then chips and mixes it with ground-up recycled
milk jugs to create a durable material used to make
signs for the Forest Service.

"What we do is take all the slash and all the stuff that
can’t be sold as firewood and combine it to create a
kind of board that can be used as a sign," owner Phil
Archuletta said. "We started the company in 1994
and we’ve been averaging about $1 million a year,
although it could be $2 million this year."

The nature of the problem

Many national forests, due to poor management
strategies in the late 1800s to mid-1900s, have more
than 1,000 trees per acre, when they should have
about 50 to 60. Overgrazing in the late 1800s, and
forest management policies that called for the putting
out of all forest fires in the mid-1900s, changed the
tree density, letting an abundance of young trees
sprout up, said George Duda, an urban forester with
the state Forestry Division.

"Fire used to keep the forests thinned," Johnson
said. "They would burn through forests every five to
10 years, and mostly they had grass, pine needles
and small trees to burn. But in the 1870s, as the area
developed, there was an awful lot of livestock brought
to this area that ate the grass. That stopped fires
from spreading as much through the forest floor."

He said drought has killed a lot of trees in the past
few years. "They’re dry and still standing there, so
now they’re a fire hazard," he said. "Dead brown trees
are really an invitation to have a fire in a hurry."

The new companies want to address the problem
before more catastrophic fires hit the state, Monta§o
said.

"We’ve seen the effects from the condition of the
forest close up as firefighters, and now we’re on the
other side, trying to prevent them before they can
start," he said.

Financial woes

Most of the contractors are starting businesses for
the first time. The paperwork, and the details to
provide benefits for workers, have been difficult,
Engler said.

Forest and residential thinning don’t fall into the
traditional insurance categories of either logging or
landscaping. And that has cost the companies
money, Monta§o added.

"The rates are really high because there’s no
workers’ comp or insurance category for us," he said.
"We’re not landscapers or loggers. We need to talk to
our senators and see if we can get a category for this
type of contracting."

Another problem is that thinning contracts are usually
paid in 60 to 90 days, which can make it financially
difficult to get a business up and running, Engler
said.

"I invoice, but it always takes a while to get paid," he
said. "It’s a struggle to meet my costs at times, as a
small business owner. I have a crew to pay and
sometimes that can be frustrating, but I just keep
working. You have to get into a cycle with it, and we’re
pretty much there now. But most contractors enjoy
getting paid upon completion of their work."

Another problem is getting rid of thinning waste
products. Some can be used as firewood or mulch,
but there’s still a lot left over, Robinson said.

"You can chip it and burn it or use it as mulch, but
there’s so much tonnage out there it’s not really an
efficient way," he said.

Archuletta’s business is trying to take care of waste
left over from the Los Humanas Co-op, which is
another community-based forest thinning operation
in the East Mountains.

"Right now we have all the chips we can use," he
said. "But when we get more demand for our
products we’ll start looking elsewhere and see how
much more we can take."

Monta§o said he’s confident most problems will be
worked out, but hopes serious attention will be given
to the issues, considering the crucial nature of the
work.

"It’s a new type of business so there are a lot of bugs,
but it’ll come," he said.

Too soon for spinoffs?

Even though the companies have fewer than five
employees, both Engler and Monta§o are thinking
about creating spinoffs.

Engler said he’d like to start a spinoff that thins dams
and other obstacles left by beavers.

"We’re also thinking of expanding and starting
another business in the Rio Grande Bosque," he
said. "The Middle Rio Grande Conservancy District is
planning some major thinning work there, and they’re
talking to a lot of contractors about it."

Monta§o said he’s also interested in the bosque
work. The conservancy district plans to thin 154
acres in Albuquerque’s bosque area, which could
take some time to finish.

"That’s a lot of work for just a few guys," he said.

It typically takes three or four days for a three-person
crew to thin a three- to five-acre property, and some
parts of the bosque are much thicker than a typical
property, Engler said.

Monta§o also wants to create new business
operations in other parts of the state.

"We’d like to get some projects in Capitan and
Socorro, which still need to get started on this work,"
he said. "We’d like to get some projects there and
hire some contractors from those areas. We want to
keep the money in those communities."

P&M Signs also sees room for expansion, especially
if it can move into some lucrative new areas,
Archuletta said.

"Our signs are ideal for the Forest Service, which
helped us, along with several other agencies, to
create a product from waste trees," he said. "The
Forest Service has a problem with its old plyboard
signs. It has cornmeal filler in it, and porcupines tend
to eat them through the winter. They come back in the
spring and the signs are gone."

Porcupines don’t like to eat Archuletta’s signs,
though, and the Forest Service has contracted with
the company to replace all of its signs with his
product.

"It may also be ideal for the construction industry,"
Archuletta added. "That’s where we want to go."

P&M Signs is working with 3M Corp. to test the signs
and see if they meet construction industry
specifications.

If it does work, Archuletta said he’d like to hire at least
five more employees and possibly open another
factory in a different part of the state, near more of the
forest thinning activities.

"I’d like to keep it here in New Mexico," he said. "And
eventually we’ll probably start paying for the chips,
which could help some of these small companies
out."

http://www.abqtrib.com/archives/business02/072902_business_forest.shtml