2, 2005
Royal Oak plant to shut down
Charcoal briquette maker has been in operation in White City for 35 years
By GREG STILES
Mail Tribune
WHITE CITY — Raw material costs and foreign competition have steadily eroded charcoal briquette maker Royal Oak Enterprisesâ€[emoji]8482[/emoji] market share in recent years.
The nationâ€[emoji]8482[/emoji]s No. 2 briquette manufacturer, based in Roswell, Ga., which once ran its plant at 7930 Agate Road nonstop, reduced to two shifts in 2003. Last year, it shed the second shift as competitors, primarily from China, wooed away major retailers and their private label contracts.
On Wednesday, Royal Oak Enterprises informed its 27 local employees that it is closing the 35-year-old plant in a matter of weeks.
"We could all see the handwriting on the wall," said manager Mike Anderson on Thursday. "Weâ€[emoji]8482[/emoji]ve been downsizing the last few years as weâ€[emoji]8482[/emoji]ve lost our customer base."
The company also operates four plants in Missouri, one in Florida and one in Tennessee. Anderson said the average hourly wage was around $16.50 at the plant, which manufactured 2½ - to 40-pound bags. Production will continue four to six weeks.
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"We havenâ€[emoji]8482[/emoji]t drawn a line in the sand and said this exact day," said Anderson, who has been at the plant since 1978. "We have raw material that weâ€[emoji]8482[/emoji]ve already purchased to use up and different things to satisfy.
"Everybody is being professional about it and going about their work. Itâ€[emoji]8482[/emoji]s not going to be easy. Human nature is such that people shun changes, but you move on."
Senior management did not return phone messages to the companyâ€[emoji]8482[/emoji]s Georgia headquarters.
The plant was first operated by Georgia Pacific, then Husky Industries of Calgary, Alberta, before Royal Oak Enterprises acquired the 20-acre site in 1984.
Royal Oak has ranked second behind Kingsford Inc., of Desoto, Kan., in production. Private label briquettes, including sales to restaurants, accounted for 98 percent of the plantâ€[emoji]8482[/emoji]s production. Three years ago, Anderson said Albertsons, Safeway, Rite-Aid, Wal-Mart, K-Mart, Western Family and Ralphâ€[emoji]8482[/emoji]s were among its customers.
"At one time there were dozens of private labels," said Anderson, who was promoted to manager 17 years ago. "Unfortunately, itâ€[emoji]8482[/emoji]s down to handfuls, which brings up the situation weâ€[emoji]8482[/emoji]re in now."
He said about a third of the employees have been with the company since it was owned by Georgia Pacific.
Royal Oak locally employed 60 prior to July 2002 when it shut down a production furnace and laid off 17 workers. It began shipping char from Branson, Mo., by rail, adding to its production costs.
Bruce Laird, a state regional economic development officer, said Royal Oak has been fighting an uphill battle for more than 15 years.
"They lost their raw material base — Douglas fir bark — when the forest product industry went into decline," Laird said. "Second, there was the impact of sharp increases in energy and that increased the value of ‘hogâ€[emoji]8482[/emoji] fuel (fuel, like fir bark, for cogeneration power plants), so there was less of it coming from places like Boise Cascade.
Imported raw materials meant higher freight costs. As wholesale buyers contracted for lower-priced imported briquettes, the White City plant saw a steady payroll decline to where one shift remained in April 2004.
"You had a diminished supply and increased demand. Add foreign competition and youâ€[emoji]8482[/emoji]ve got a near-perfect storm."
Laird anticipates there will be plenty of interest in the plantâ€[emoji]8482[/emoji]s property. County records show that the property, adjacent to Boise Cascade and Panel Products operations was obtained for $1.375 million in 1987. "You never know, but I think somebody out there will be real interested because there are a category of companies out there that have seen a lot of growth."