A plume of steam rising again from the plywood plant next to Interstate 5 this week signaled an early Christmas gift for Rogue River.

A plume of steam rising again from the plywood plant next to Interstate 5 this week signaled an early Christmas gift for Rogue River.

Murphy Co. of Eugene, which spruced up the property over the past year, began producing plywood again this week, hiring 108 workers initially.

"Everybody's thrilled to death," said Sandy Henderson, a 75-year-old Wimer resident. "There are people who'd been laid off who are back to work. It couldn't happen at a better time of the year."

Murphy, which has other operations in Oregon, bought the 51-acre property and 164,000-square-foot plywood plant in January for $3.6 million.

Since then, it has invested millions of dollars in new equipment, assisted by a $100,000 loan from the Governor's Strategic Reserve Fund, according to Business Oregon.

Milwaukie-based Panel Products shut down the mill in early 2009, putting dozens of people out of work.

Murphy owner John Murphy said about 40 percent of the mill's employees will have previously worked at Panel Products. Other new hires previously worked at mills in the area.

With double-digit unemployment in Jackson County, Murphy said reopening the plant in Rogue River was a plus. "It's exciting to be in these rural communities when they need it so bad," he said.

This year so far, national housing starts are in the 550,000 range, up by about 3.9 percent from a year ago, Murphy said. Next year industry experts expect housing starts could hit 745,000 units.

"They're counting on a slow, gradual climb out of this housing hole," he said.

The mill will complement Murphy's other operations. A hardwood plywood plant in Eugene and a structural beam and header plant in Sutherlin use some of the best raw materials. The remaining materials and lower-grade veneers can now be sent to Rogue River.

"This puts us full circle as a company," Murphy said.

The Rogue River plant will also put Murphy in a good business position as the economy climbs out of the recession, particularly with other plywood plants shutting down.

"We think we can make it a competitive unit," he said.

Currently, the plant is operating with one shift. Its full contingent of employees will be on hand today as the plant gets ramped up. Ultimately, Murphy said, he would like to have three shifts and about 200 employees.

Murphy said the only problem he sees on the horizon is the lack of availability of raw materials from public forest lands.

Kimberly Clifford had worked at a mill in White City before it closed down a few years ago.

Then, she got an unexpected call recently to come to work at Murphy. "I was shocked," she said. "I love it."

Clifford loads veneers into a dryer as the plant ramps up production in its first week of operation. "It's hard work, and I'm sore," she said. "The pay is good, the way they treat people is good, and it's just a good place to work."

Before she was hired at Murphy, Clifford said she had a difficult time finding a job that paid anything but minimum wage.

Despite the economy, the reopening of the plant is a good sign, Clifford said.

"They really must have a lot of faith to do this at this time," she said.

On Friday, people filled out employment application forms at the plant. Murphy is taking advantage of a federal tax benefit by hiring people who have been on the unemployment rolls.

The reopening of the plywood plant is a reversal of a downward trend in the Rogue Valley that has seen many timber products companies close their doors. In 2009, Boise Cascade dismantled its plywood plant in White City.

Business Oregon, which administers the Governor's Strategic Reserve Fund, helped Murphy get back on its feet after its Sutherlin plant was destroyed in a fire in 2005. The new 200,000-square-foot plant restarted production in January 2008.

Becky Dean said the town had anticipated the mill would reopen soon. "When the steam started coming out, it was confirmed," said the 60-year-old Rogue River woman. "I'm excited for everybody."

Del Schultz said the town was very concerned when the plant went into receivership, but welcomed the purchase by Murphy.

The 64-year-old Rogue River resident said the company has really cleaned up the plant but nobody was really certain when it would reopen.

Seeing the stacks of logs waiting for processing is a welcome sign for a town and a county hard-hit by the recession.

"I'm happy for all the people able to work there," he said.

Jerry Fitzgerald worked at the Panel Products plant and other timber products companies in Southern Oregon over the years. Since his retirement two years ago, the 66-year-old Rogue River resident has seen other operations go through tough times, or have been shut down.

"I think the plant reopening is the best thing for the town," he said.

Reach reporter Damian Mann at 541-776-4476, or e-mail dmann@mailtribune.com.