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Mistik manages growing wood demand
Saskatchewan’s Mistik Management is adapting to the growing timber needs of the NorSask Forest Products mill, which is adding a shift, and is going to require twice as much wood—but it’s a challenge they’re very happy to have.
By Tony Kryzanowski
NorSask Forest Products in Meadow Lake, Saskatchewan will require more than twice as much wood fibre this fall. Meeting that need represents a major challenge for the stud mill’s woodlands management provider, Mistik Management Ltd. However, given the downsizing that has occurred at Mistik over the past five years, it’s a challenge that they and their logging contractors are happy to have.
“We’re in a build-out phase and that has a lot of positives to it, but it comes down to making some very important decisions because once you head down that path, you aren’t going to turn around very quickly,” says Mistik’s General Manager, Al Balisky. “So we want to enter that phase cautiously, with a lot of thought, and make the very best decisions as we go forward.”
Since 1990, Mistik has been providing woodlands management services such as forest management planning, hiring and coordinating logging contractors, and delivering wood fibre to the mill gate for two clients. The first is an aboriginally-owned stud mill called NorSask Forest Products and the second is a mechanical pulp mill a short distance from NorSask now owned by the Paper Excellence Group and operating as Meadow Lake Mechanical Pulp (MLMP). NorSask and MLMP each own 50 percent of Mistik.
Mistik has always had very close customer relationships, particularly with NorSask. Its offices are located right next to the stud mill’s main administration building. So it’s no surprise that when the stud mill recently faced hard times that Mistik felt the pain equally.
NorSask throttled down production from two shifts to one shift during the recent downturn in the American housing market. But on the positive side, it took very little curtailment. Annual production was reduced to about 72 million board feet of lumber per year although the stud mill is capable of producing nearly twice that much. Cutting production in half meant demand for a lot less fibre and consequently, significant job loss at Mistik. Prior to the collapse, Balisky says the organization had as many as 50 employees. Now it is down to 10. During the downturn, they also lost about a dozen contractors.
“We took every reasonable step we could to minimize the impact on people and contractors, and being as light-handed as we could,” says Balisky. For example, to the best of Mistik’s ability, contractors weren’t simply let go. They were given two years’ notice that their contracts would likely not be renewed.
“But the downturn was significant, it was deep, it was profound, and it wasn’t easy,” Balisky adds.
The woodlands management company has come out of the downturn feeling optimistic with NorSask’s recent announcement that it will ramp back up to two shifts by fall and increase production to about 160 million board feet annually. This means that it will require about 700,000 cubic metres of softwood compared to the 325,000 cubic metres it has consumed annually over the past few years.
Balisky says Mistik survived because of the flexibility that their clients, contractors and local communities showed through the lean times to harvest timber as close as possible to the stud mill to minimize delivery costs. The decision by NorSask to put on an extra shift will undoubtedly have a very positive ripple effect throughout northwestern Saskatchewan.
Mistik is responsible for forest management in what is generally a mixed forest covering a geographic area of about 1.8 million hectares along the Alberta border, from Glaslyn to the south to nearly La Loche in the north. It consists of about 70 per cent hardwood and 30 per cent softwood, primarily white spruce and jackpine, with logs averaging about 12” in diameter.
Not only does Mistik have to ensure that the quantity of wood fibre is delivered as required by their clients, but also that the quality is there. They have to manage that carefully, particularly because their jackpine logs can be quite crooked and limby, with a high incidence of mistletoe. As is typical with a fire-origin forest, the wood basket is on the younger side because of the number of forest fires that the area has experienced over the past couple of decades.
There are about a dozen communities within Mistik’s forest management area, which has a significant impact on the company’s management planning.
“We work closely with three First Nations communities that are closely allied to the Meadow Lake Tribal Council and we try to build a contractor work force from the communities in our forest management area,” says Balisky. Back in 1990, he says that the Mistik model of having a single entity managing the forest on behalf of several mills and delivering the wood to their gate was quite unique. But it is now becoming more and more the norm.
“I think we are still unique in how we work closely with Aboriginal communities and First Nations contractors,” says Balisky. “We are a grassroots organization with a very strong connection to the local First Nations and northern communities. Our staff reflects that as well.” For example, Bill Murray is Mistik’s Operations Manager, and he grew up in the northern community of Ile a la Crosse.
Murray says using one woodlands management service for several mills delivers an advantage, in that there is the efficiency of using one forest planning team and one group of contractors to harvest both the softwood and hardwood fibre. Also, given the number of communities within the forest management area and the variety of traditional activities still taking place within the forest, it makes for better communication to only have one forest management organization to deal with.
Mistik contracts the services of three logging contractors, and in an effort to provide some stability to the contractors, they offer them five year contracts. These are Almar Limbing, Waterhen Forestry and a collection of owner/operator contractors from around the communities of Canoe Lake, Jans Bay, Cole Bay, Beauval and Ile a la Crosse that work cooperatively. All use modern mechanized logging equipment and there is a large Aboriginal presence within the entire work force, although different approaches have been taken. For example, Waterhen Forestry is owned by the Waterhen Lake First Nation and employs about 50 First Nations staff in both its log harvesting and haul operations, whereas Aboriginal communities around Canoe Lake and elsewhere have taken the approach of encouraging individual owner/operators to work together, giving them the flexibility to be as small or as large as they’d like.
Both Balisky and Murray say that administratively, it’s definitely more challenging to have to coordinate a large group of owner operators, but Mistik respects the community’s choice. Murray adds that putting the Canoe Lake owner/operator group together was an interesting evolution; they eventually found a good combination of service providers who were eager to manage their own businesses and also brought considerable logging experience to the table. The group also gets along well, which is important when it comes to working as a cooperative versus a single owner contracting business.
A major objective since Mistik began operations—based on feedback it has received from area communities—is the focus on creating local employment as much as possible.
Waterhen Forestry Manager William Hill says that the logging company not only provides fibre to Mistik Management, but has also offered a worker training program for the past three years. This helps ensure it has a strong base of qualified operators because of people leaving the industry due to the aging workforce and to replace those who find work elsewhere. Mistik is adopting that training model to help maintain its log truck driver work force, which is a challenge with the oil and gas industry so close in northeastern Alberta.
“It’s been made very clear to us whether it is the Band or the mayor and council of the local communities that if there is a benefit, they at least want a crack at it to develop that opportunity themselves,” Balisky says.
Mistik meets regularly with its clients to determine their needs for the coming year, plan where logging will occur, and how the road network will be developed to access the fibre. In terms of contractor management, Mistik tends to place contractors in areas based upon the size of the cut in relation to the size of contractor. They also consider where the planned harvesting areas are in relation to specific communities and work hard to designate local contractors to work on those harvests to provide local employment and so employees are working closer to home.
“It does constrain us a bit in terms of contractor movement,” says Balisky, “but it’s what has been the preferred option by the communities. So we use that as the basis for our operations to the best of our ability.”
Situations like NorSask’s need for substantially more wood fibre is requiring a major adjustment in Mistik’s management of the forest resource because it means that it will need to access fibre further away. This will undoubtedly have an impact on wood delivery costs. Because Mistik is managing both the softwood and hardwood resource, and because the area is generally a mixed wood fibre basket, NorSask’s demand will also have an impact on how the woodlands management company coordinates its fibre delivery to its pulp mill client.
Balisky says that Mistik is fortunate to be working with provincial regulators who are flexible in their willingness to make adjustments to long term forest management plans so that they can address situations like NorSask’s requirement for more fibre, as long as ecological and environmental requirements are being met to the satisfaction of both the province and local communities.
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