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A scrappy sawmill
A group of New Brunswick entrepreneurs have taken a fence company that had closed its doors and turned it around, utilizing almost every scrap of wood--and along the way, getting the most out of their residual wood.
By George Fullerton
A business model in the forest industry does not have to be complicated.
For example, Stephen Crabbe, the president and majority owner of SWP Industries in St. Stephen, New Brunswick, believes that producing a high quality product and delivering it on time is the key to a successful manufacturing business.
The company was born out of the ashes of the St. Stephen Fence Company, an American-owned firm that closed its doors in 1995. At that time, Crabbe and three partners bought St. Stephen Fence Company's assets and since then have turned a money losing operation into a leading supplier of fence products to the northeast United States.
Crabbe says SWP Industries is a tight knit operation.
"It's very much a family business--my brother and my brother in-law are both partners, along with the most intelligent fence industry sales person I have ever known," says Crabbe. "We all actively work in the business."
SWP is a business that is supported by more than a century of experience among the partners.
Crabbe grew up working at his grandfather's mill in Bristol, New Brunswick. After getting a business degree from Husson College in Bangor, Maine, he moved on to management positions with major wood products companies in Labrador, New Brunswick and South Carolina.
"It's that experience that informs SWP Industries' strategy," adds Crabbe.
There are lots of fence businesses selling into the market, but SWP stands apart, with its strong focus on customer and quality, he says. "We're different because we have a lot of control over quality at every step of the process-- and we are a customer first company."
While the current recession has a lot of wood products companies hanging on for dear life, Crabbe is making deals and securing more market share.
"We had 350 customers at the start of this year, which we have since grown to 700 through a strategic business agreement with LR McCoy out of Massachusetts. We're going to join our sales and marketing teams, and SWP is going to look after manufacturing, inventory and delivery. It's a win-win as I see it."
Crabbe says that SWP provides their customers with a large selection of product and delivery options.
"We deliver catalogue pricing to all our customers. It is simple, clean and easy to follow delivered pricing for customers between here and Baltimore. Our customers have the freedom of dealing with a salesman, or our order desk direct."
Crabbe says SWP's website has engineered drawings and specifications of all of the company's products, including cedar fence panels, as well as vinyl and aluminium.
"Homeowners, especially in the northeast U.S., consider a fenced yard a key part of the American homeowner's dream. You can make a fence out of a lot of different materials, but a natural cedar panel fence is still the market leader," explained Crabbe.
In addition to the manufacturing plant at St. Stephen a couple of minutes from the U.S. border crossing, SWP also operates two sawmills, one at Bayside in southwest New Brunswick, and another at Arthurette in northwest New Brunswick.
Crabbe points out that because the mills are spread out, yet close to the Maine border, they are strategically situated to extend SWP's potential wood basket.
"Our wood supply is second growth northern (eastern) white cedar. Half of our wood supply is out of Maine, the other half comes from private woodlots and Crown land in New Brunswick," he explains.
The processing in both sawmills starts with logs going through Morbark 531 Rosser debarkers and then feeding into PHL and Keystone twin-saws.
At the Arthurette mill, the wood feeds into a Cardinal circular resaw. At Bayside, a Mainland circular resaw and a Yates band saw are used. Both mills use Valley 3-10 trim-saws.
Mobile equipment at both sawmills consists of Volvo L110 loaders to handle roundwood and Volvo L50's for moving bundles. SWP has three transport trucks, a Peterbilt, Kenworth, and Western Star. The company also has two leased units for multi-drop deliveries.
Since 1999, SWP's headquarters and manufacturing facility has occupied a 120,000 square foot building in the St. Stephen, New Brunswick, business park. The building provides space for inside lumber storage and several production lines.
A 60,000 board-foot Nyle dehumidifying kiln dries lumber for finger-jointing, paneling and engineered lamp-posts. The finger jointing equipment is made by Grecon. The value-add plant in St. Stephen has two moulders, a Weinig and a Waco line.
Crabbe says a lot of the equipment in the plant--like transfer tables and machines to make lattice--have been designed and constructed in-house.
"We want to scratch as much value as we can out of every log and every piece of lumber that we handle," explained Crabbe. "When most fence manufactures look at six-foot fence panels, they think six-foot lumber. We look at six-foot fence panels and come up with ways to make them out of four-foot and two-foot pieces of lumber as well."
Crabbe says getting the most value out of every board means finding profitable ways to deal with low-grade lumber.
"We've developed a one-way cedar pallet made out of our low-grade materials. We sell a lot to the aquaculture industry--they like it because a lot of their product only ships one-way, and these pallets are cheaper and lighter. So our pallets can save money for those companies."
Sill, Crabbe says all their efforts would be for naught without good people working in the plant.
"Our workforce is absolutely key to our success," he emphasizes. "I've worked all over North America, and our workers in Charlotte County are as good as I've seen. We pay above average wages and we get above average performance from our people."
That said, like most every business struggling with the economic downturn, Crabbe says that their major challenge is securing financing.
"Right now, the banks aren't making things very easy for us."
Making smart money from sawdust
Similar to other sawmilling enterprises, SWP Industries of New Brunswick has been trying to find a way to make money from the sawdust and other residue from its operations.
It's taken up a lot of Stephen Crabbe's time, but he's figured out a way to do it.
Crabbe, one of SWP's owners, has built a plant at the company's Bayside sawmill that turns wood waste into high density burnable fire logs. It's a unique bio-energy product that will boost the company's bottom line. But he explains that getting there hasn't been easy.
"I've been researching this project for many years and we have carried out tests on equipment all over the world--Belgium, Denmark, France, and the U.S. But I couldn't find anything that worked well on cedar."
Crabbe visited China and found the answer to his problem: a man by the name of Wei Dong from Yingkou City with whom he formed a business partnership. The business manufactures an extruder that turns low density shaving and sawdust into high-density fuel logs.
The process doesn't use any glues or waxes, relying instead on extreme pressure in the manufacturing process to naturally bind wood fibres. Crabbe says the logs burn very cleanly and evenly, from the outside in. The logs can be burned alone, in stoves or fireplaces, or they can be used along with traditional hardwoods.
Crabbe's work on briquetting fuel logs has lead to the establishment of Chincan Bio-Energy Corporation, located in China.
"We purchased a small briquetting facility in China and moved it back here to test and prove our manufacturing concept. We've worked with a university in China to improve the process and equipment. We now manufacture our own extruders and put together lines including dryers, furnaces and handling equipment for various wood species."
The briquetting process begins with mill waste going through a hog with a
The material moves through a screen that removes anything bigger than three millimetres, sending it back to be re-ground in the hog. The uniform material then moves to a dry storage bin at the mouth of the briquette extruders.
Each extruder is capable of processing 1,000 pounds of material per hour.
The extruders are gravity fed. The material enters a tapered screw system that continually forces the material into a smaller cavity, which creates enormous amounts of friction and heat. The heat generated through the process turns the wood cells into a glue-like substance binding the entire log together. The finished briquette fire log product is then bagged and stacked on pallets for shipment. The entire plant process requires only four people to operate.
And the results are impressive. Recent tests show that the logs possess about 9,000 BTUs per pound. SWP has begun developing fire log markets in the northeast United States where the customer response has been very positive.
While the system was developed initially to handle SWP's cedar waste, Crabbe is confident that their briquetting system will work with wood waste from all North American tree species.
Crabbe says that this new business opens up a world of opportunity. He explained that the briquette manufacturing plants can easily be designed to meet the waste capacity of any size mill or wood manufacturing plant. Briquetting also offers a much more attractive business opportunity compared to sending trailer loads of residue to low grade hog fuel markets.
"We are in the final stages of starting a 10,000 ton per year facility and it is
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