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Re-start for White River
By Tony Kryzanowski
“Daddy’s coming home.”
That’s a statement that’s being repeated in many White River, Ontario households these days as the former Domtar-owned sawmill in this northern town comes back to life as White River Forest Products.
Due to the remote location of the community—being four hours north of Sault Ste. Marie—it was common for both parents to work at the sawmill when it was operated by Domtar, and it provided about 200 jobs in this small town.
When it shut down in 2007 as part of a general industry downturn, it unfortunately had lots of company—some 80 per cent of the forest industry in this region of Ontario shut down. It had a severe impact on many White River households, as some suddenly lost both incomes, forcing many fathers and husbands to seek work elsewhere. Some of the skilled trades people found jobs in the local mining industry while others were forced to look for work far from home, out West.
“Many of them are coming home now and returning to jobs they had at the sawmill,” says Frank Dottori, the major shareholder of White River Forest Products. Dottori is a very familiar player in the forest industry; he was one of the founders of Tembec Inc. He retired as president and chief executive officer in 2005. Since then, he has remained involved in the forest industry, primarily as Chairman of the Board for a pulp mill owned by the Aditya Birla Group of India down the highway in Terrace Bay. He is also chairman of the Centre for Research and Innovation of the Bio-Economy (CRIBE).
“We took Tembec from a shut down pulp mill and turned it into a $4 billion company with 11,000 employees and 55 operations including 12 sawmills,” says Dottori, who was born in Timmins and over the years has maintained his primary residence in the northern community of Temiscaming, Quebec.
He has a controlling interest in White River Forest Products, and at the age of 74, has been at the helm, directing the various activities and hiring processes to put the sawmill back into production.
“When we did our due diligence on Domtar’s sawmills, the Timmins mill was the best mill in terms of margins and profitability, and the White River sawmill was number two,” says Dottori. “So it was a good mill and I knew it was a good mill. It has one of the best secure wood resources in eastern Canada.”
The ownership group consists of three partners: a group of two private investors consisting of Dottori and the Butler Family, which worked to find an investor to re-start the sawmill, the Pic Mobert First Nations, and the Township of White River. Dottori has the largest stake, which provides him with controlling interest in the sawmill. He describes the Pic Mobert First Nations as “absolute assets and promoters” in the overall effort to re-start the sawmill. Personnel from the First Nations group were already busy last summer cleaning up, maintaining and repairing equipment in advance of the sawmill’s start up this fall, and also provided some human resource services.
White River Forest Products has an agreement with Pic Robert to create a logging company, which will hire owner/operators to work in specific logging phases, with First Nations personnel given priority as equipment operators. Dottori says this agreement was accomplished quite easily, although it will take some time to train First Nations residents for logging jobs, and as owner/operators. This logging company will harvest half the annual cut for the sawmill, with private contractors hired to harvest the remainder.
Asked about his decision to step back into the solid wood business, Dottori described himself as an entrepreneur. “And being an entrepreneur, when you see a mountain out there, you have to climb it.”
He says that the White River sawmill had been profitable prior to its shutdown, and given his connections with forest product marketers from his days at Tembec, it was no problem re-establishing sales channels for the dimensional lumber it produces. In fact, their entire production has already been sold. Part of the reason for that is the high quality lumber they are able to produce from their high quality sawlogs. Dottori’s connection with the pulp mill in Terrace Bay has also paid off, as the sawmill will sell its chips to that operation, and they also have long term supply agreements for the mill’s excess hog material, shavings and sawdust.
The wood basket feeding the sawmill is primarily black spruce in the 8” to 10” diameter range, with the added bonus that it is within 100 to 120 kilometres of the sawmill. The mill will consume about 630,000 cubic metres of wood annually and produce 130 million board feet of lumber on a two-shift basis. About 70 per cent of production consists of 2 X 4 and 2 X 6 in 16’ lengths.
White River Forest Products is providing 105 direct jobs and the plan is to return production to two shifts.
What continued to give local residents hope that the sawmill would one day start back up was that the White River Township and Pic Mobert First Nations worked hard to keep the Sustainable Forestry Licence (SFL) allocated to the sawmill intact, as they looked for a new owner. Dottori says that was an astute decision, given the challenges of acquiring a secure wood supply in Ontario, created by what he described as a complicated system of forest allocation.
“It’s very difficult to invest $20 million or $30 million if you don’t know if you have a long term wood supply and at what price. Keeping the SFL is the only reason the sawmill is here today,” he says. “This sawmill has an excellent secure wood supply and that is a very big deal.”
About 60 per cent of the logs arrive tree length and are cut to length in the yard with both a gang slasher at the front end of the sawmill as well as a yard slasher. About 40 per cent is delivered cut-to-length in 8’, 9’ and 16’ lengths. The logs are debarked through four debarkers: a Nicholson, two Cambio’s and a SweCan for the large logs, before collecting in five, top-feed decks, waiting to be processed through the sawmill.
The sawmill has three lines: the first features an Optimil breakdown unit capable of handling random length logs up to 16 ‘ and in the 24” to 30” diameter range, followed by a bull edger, and then a chipper edger. The Optimil PeeWee line also processes random length logs up to 16’, in the 8” diameter range. Cants from both lines are processed through the bull edger. The third line, featuring a HewSaw breakdown unit, was designed to handle logs in the 6” to 8” range in 8’ lengths. It has been refurbished so that it can now handle larger diameter wood.
“We’ve modernized and modified that HewSaw and brought it up to 2013 standards so that it can handle 10” to 12” diameter wood,” says Dottori. “That makes it much more versatile and it will run at twice the speed. We have basically doubled its capacity.”
The lumber from all three lines collects at a trimmer/sorter and is then stacked in preparation for drying in the three kilns.
During start-up this fall, Dottori says they intended to operate at roughly the same production rate and cost structure as when Domtar operated the sawmill.
The HewSaw line is fairly new, having operated for only about five years, and a new, high-speed, Coastal planer was installed in the late 1990s. However, an investment has been made to install a new VAB Solutions automated lumber grading system in the planer mill to replace manual graders, as well as a new Brookhuis machine stress rating (MSR) grader, which also measures moisture content.
Brookhuis says it has a unique product range of strength grading systems, all provided with its Timber Grading Technology (TGT) that it developed in co-operation with wood specialists of leading international institutes. The company has sold over 100 of its TGT technology systems over the last two years. Brookhuis is finding the demand for wood with high strength values that is graded in a controlled manner is increasing, meaning increased demand for MSR equipment that determines the strength and performance characteristics of lumber.
VAB Solutions has now sold 19 automated lumber grading systems, ten on stud lines and nine on random lines. The company says it is able to offer unique technology with its systems which feature: high grading accuracy; no calibration; fast and easy mill integration; and high value, in terms of payback.
While the focus at present is to achieve a quality start up at the White River mill operation, the goal over the next two years is to reduce production costs by $50 per thousand board feet, with an investment of between $12 and $15 million.
“Our challenge here is that currently, the sawmill isn’t optimized for the wood we are running,” says Dottori, “and we are average in our cost of production.”
So the investment focus will be in cost reduction in areas such as increasing the size of the bull edger from 6” to something in the range of 8” to 10” to increase yield and reduce costs, and dealing with a bottleneck at the trimmer/sorter, which at present can only handle about 100 pieces per minute. The goal at this location is to process at least 160 pieces per minute. Dottori adds that bottlenecks at the chipper/edger will also be addressed, as well as the sawmill infeed, to improve log sorting as they enter the front end.
He believes that the strength of the sawmill going forward will be the quality of its wood supply and its employees.
“I think we have a good group of really dedicated employees here,” Dottori says. “To see the commitment of the employees, it reminds me of when we started Tembec 40 years ago, when people were dedicated, it was their community and their jobs. It really makes a difference.”
The re-start of the White River sawmill—through a company headed up by Tembec veteran Frank Dottori—is helping to bring the economy of this small northern Ontario town back to life.