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Logging and Sawmilling Journal November 2014

february 2015

On the Cover:
Thanks to a low Canadian dollar, and a modest rebound in U.S. housing starts, Canadian lumber prices are at reasonably healthy levels, resulting in sawmills keeping busy. The Council of Forest Industries (COFI) will be looking at how to keep those mills busy at its upcoming convention in Prince George, B.C. in April. See the special pre-convention coverage beginning on page 44 of this issue of Logging and Sawmilling Journal (Photo of the new Lakeland sawmill in Prince George by Doug Hlina of Mill Tech Industries)

Renewable fuel oil can help fuel a sawmill’s bottom line
Ontario “liquid wood” producer Ensyn Corp. is ramping up production of its renewable fuel oil and has put the welcome mat out to the forest industry, noting that its biofuel facilities—when attached to an existing sawmill—can help to improve the economics of a mill.

High yield mill investment
A $30 million rebuild at EACOM’s sawmill in Timmins, Ontario, was a major undertaking for the company, but it’s expected to yield a production increase of as much as 20 per cent.

Have wood—will move it
Logging contractor Hec Clouthier & Sons harvests a wide assortment of logs in the areas they work in, in eastern Ontario. Typically they sell wood to 13 mills—but after a significant blowdown, they were able to sell wood into a staggering total of 38 mills.

Early woodlands adapters
Both Quebec logging contractor Mario Gauthier and forestry co-op Forestra have adapted well to new regulations that amended the fibre allocation system in the province, thanks to Gauthier’s solid equipment and Forestra’s focus on developing fibre markets.

Timber/beam specialists
B.C.’s Hyde Sawmill has found a successful market niche producing high quality timber and beam products using three Wood-Mizer band saws, and a Mahoe circular saw from New Zealand.

Timber price tracking
B.C. company WoodX offers a market intelligence data service to prospective timber buyers to help them make prudent and competitive bids in the BC Timber Sale program.

High performing mill iron
Every efficient sawmill needs a fleet of high performing millyard wheel loaders and the Fornebu Lumber operation in New Brunswick is finding its Hyundai equipment —which includes the big daddy of the fleet, a Hyundai 770 with 300 horsepower—fits the bill very nicely.

The Edge
Included in The Edge, Canada’s leading publication on research in the forest industry, are stories from the Canadian Wood Fibre Centre and Alberta Innovates - Bio Solutions.

Plenty of issues front and centre at COFI convention in April
Our special pre-convention coverage

The Last Word
The outlook for Canadian lumber producers over the next several years is positive—meanwhile, the outlook for Canadian pellet producers is positively rosy, says Jim Stirling.

DEPARTMENTS

Tech Update: Log, Lumber, and Grade Optimization Systems

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Quebec logging contractor Mario Gauthier and forestry co-op ForestraEarly adapters

Both Quebec logging contractor Mario Gauthier and forestry co-op Forestra have adapted well to new regulations that amended the fibre allocation system in the province, thanks to Gauthier’s solid equipment and Forestra’s focus on developing fibre markets.

By George Fullerton

While Faconnage MG has seen a wide variety of manufacturer’s colours in their equipment stable over the years, the current line-up is decidedly Ponsse, with a new Fox harvester (pictured) an Ergo harvester, an Elephant King forwarder (the first in North America) and most recently a Buffalo Dual.

Quebec logging contractor Mario Gauthier says that working within an hour-and-a-half commute of his home in Chicoutimi (Saguenay) is a welcome change from the long distance commutes he’s used to, to remote logging camps on the north shore of the St. Lawrence River.

Gauthier’s harvest team has secured employment with Forestra Inc. and a good portion of the season will be divided between operations on reserve faunique des Laurentides and ParcMontsVallin, both multiple use forest landbases south of Saguenay, Quebec.

Like every enterprise connected to the forest industry, Gauthier’s contracting business, Faconnage MG, faced major challenges in recent years brought on by the collapse of the U.S. housing industry—combined with the global economic downturn—that drastically reduced the demand for Canadian lumber.

Gauthier estimates that economic issues reduced Quebec’s mill capacity by 25 per cent, and similarly, caused a 25 per cent reduction in the harvesting contractor base.

Faconnage MG’s survival was achieved in large part by a strategy to cut costs at every opportunity, and at the same time maintaining high productivity.

Faconnage MG is truly a family business with Mario Gauthier (right) his wife Helene, and their son, Mario Gauthier. Helene handles tasks that support the operation, and Mario, in addition to operating equipment, has also assumed supervisory and business administration duties.

Gauthier relied on management skills accumulated over more than three decades in the business to keep his team of dedicated operators focused on safety and production, and maintained a fleet of high performance harvesting equipment. He allowed that one of their key strategies was to cut operating costs wherever possible, specifically working to achieve the highest possible fuel efficiency. Fuel efficiency objectives extended to the harvester fleet as well as the commuter fleet used to transport personnel and service his equipment.

While Mario Gauthier is the founder of Faconnage MG, he credits his wife of 36 years, Helene, for her support and contribution as both a life partner and business partner. In addition to managing family affairs while Mario was away at distant operations, Helene handled administrative work as well as critical parts chasing tasks that kept the operations going well. Mario and Helene have also welcomed their son, Charles, into the family business and while he enjoys operating equipment, Charles has also assumed supervisory and business administration duties.

Gauthier began his contracting career some 38 years ago, initially working with family members in a chainsaw and cable skidder crew, before he started his own skidder operation. He adapted to mechanized harvesting, initially with grapple skidders and roadside slashing, and eventually moved to cut-to-length harvesters and forwarders. While readily adapting to new types of equipment, Gauthier also focused on hiring and developing talent for the operator seats, and selecting equipment to provide the best performance and productivity.

Mario Gauthier (left) and the operator on the Ponsse Fox harvester. Gauthier relies on management skills accumulated over more than three decades in the business to keep his team of dedicated operators focused on safety and production, and maintains a fleet of high performance harvesting equipment

While Faconnage MG has seen a wide variety of manufacturer’s colours in their equipment stable over the years, the current line-up is decidedly Ponsse, with a new Fox harvester, an Ergo harvester, an Elephant King forwarder (the first in North America) and most recently a Buffalo Dual which replaces a Dual lost to fire. The recent addition of a Freightliner tractor and float is just about the only piece of large rolling stock that does not sport the yellow and black colour scheme.

Charles explained the preference for Ponsse equipment is essentially due to the machines’ great fuel efficiency and high productivity. He pointed to their new Fox harvester as an example. “This machine has double bogies which allows it to work securely on very steep slopes. It has a reach of more than 30 feet with the H5 head, which processes wood very fast and is well suited to the small stem diameters we often work in. And it gets the job done with only a four cylinder engine which is very economical on fuel.”

The Gauthiers credit their Ponsse dealer, Hydromec, for sales, service and especially parts support, helping make their operations a success.

Faconnage MG’s Ergo is assigned stands on less steep ground and/or stands with larger diameter trees. Faconnage was one of the early adopters of the Dual machine, which converts between harvesting and forwarding, as day-to-day operations require, ultimately making the overall operation (wood to roadside) highly efficient.

Changes in Quebec’s forestry regime indirectly presented the opportunity for Faconnage MG to contract for Forestra Inc. Prior to 2013, major mills secured their total fibre volume from Crown forest through a CAAF (Contrats d’Approvisionnement et d’Aménagement Forestier). However, changes in legislation in 2013 amended the fibre allocation system. Under the new rules, mills receive 75 per cent of their fibre requirement as they did through the CAAF system, and the remaining 25 per cent of the Crown fibre is allocated to industry, and is offered through a public bidding process.

This competitive bidding process allows the Quebec government to see what the market value for wood actually is, and refer to it for setting Crown land stumpage rates. The new fibre allocation system is also expected to appease the U.S. trade lobby that question Quebec’s Crown stumpage system.

The bidding process is open to various entities (mills, contractors and forestry co-ops). With their successful bid, Forestra won the right to harvest and sell a portion of the new 25 per cent allocation of Crown fibre, then found a market for the wood and went looking for contractors to harvest and deliver the wood to markets.

Forestra Inc. was established in 2010 with the amalgamation of two forestry worker co-ops in the Saguenay-Lac St. Jean region, Co-op Forestière de Ste-Rose and Co-op Laterriere. According to general manager Louis Pelletier, creating Forestra allowed the two co-ops to harmonize their management structure and focus their talents, to serve clients with a broader suite of services. The strategic alliance, Pelletier explained, enabled the two co-ops to gain efficiencies in their operations and provided them with the resources to bid on large forest management contracts.

Forest co-ops have a long history in Quebec, dating back to the late 1930s. Through their history, these member organizations have provided contract services to the forest industry for harvesting and silviculture. Some co-ops have expanded services to include seedling production, sawmilling, biomass production, geomatics, logging camp operation, roadbuilding and forest management planning services.

Contracting fibre harvesting and developing markets for that fibre is not a totally new enterprise for Forestra, pointed out Pelletier. In 2010, Forestra won a five-year contract to produce 135,000 green tonnes of biomass in the Lac St. Jean region, and established contracts to supply the Jonquiere Hospital, and the Fromagerie Boivin cheese plant in the town of La Baie, on the Saguenay Fiord.

Forestra continues to work to help develop additional biomass markets. Pelletier explained that because of the low value assigned to biomass, they must develop markets within 100 kilometres from the forest biomass resource.

Forestra made a successful bid on the 25 per cent allocation to harvest in the reserve faunique des Laurentides and ParcMontsVallin, south and east of Saguenay. Both landbases support major recreational uses and wildlife habitat goals in addition to fibre production.

Pelletier explained that while the provincial government has the final approval on the management plans that administer activities on the two landbases, the process to develop the plans involves a number of interest groups who are consulted and who meet together to bring their various interests to the management planning process. Since wildlife protection is a major goal, road access is always a concern.

“We always have good relations in that process,” says Pelletier. “We all respect one another and consultations are definitely two-way. Each party has their rights, and at the end of the process there is a reasonable plan to present to the government. For operational planning, Forestra presents detailed mapping of harvest blocks to government officials for final approval before operations begin.”

When it came time to market the wood, Forestra found a willing buyer in the Boisaco sawimill, in Sacre Coeur on the east side of the Saguenay fiord.

“In our case, Boisaco offered us a deal to purchase all of the wood production, both large and small logs and pulpwood,” said Pelletier. He pointed out the deal was convenient for Forestra, in that they did not to have to invest the time and energy dealing with a number of different mills to sell the different quality logs.

Both Co-op Forestière de Ste-Rose and Co-op Laterriere—and Forestra—have long established working relationships with Boisaco, undertaking both harvesting and silviculture contracts.

Quebec’s DNR has created an overall management plan for the individual land bases which sustains multiple forest values, including fibre. Forestra staff developed an operating plan based on the objectives of the management plan and after approval from DNR, proceeded with harvesting.

“I have known Mario for many years, and he has worked for our co-op in the past—we are very happy to have him involved in our operations,” said Pelletier. “Mario’s operations are very professional and he is a real gentleman in his business affairs.”

And the Gauthier operations continue on with the next generation now involved. In his early 30’s, Charles Gauthier is finding a fulfilling career in the harvest contracting sector.

“I love the work,” he says. “I love the woods and the machines and getting wood to roadside. I enjoy working in the camps and managing a crew of operators. I find it very rewarding work.”

Charles related that in terms of adapting to forest certification programs over the last decade, it has been a good fit for Faconnage MG.

“We heard a lot of concern about forest certification and the challenges contractors would face to meet those demands. But once we actually saw what certification actually required of us, we realized that our operation was already in compliance.

“Rather than facing radical changes in our operations, we found we only had to tweak a few parameters to meet the certification demands.”

With Charles taking on more supervisory responsibilities on operations closer to their home base, Mario says he expects he will be enjoying more time close to family and home—of course mixed with a little trucking with his new Freightliner and float.