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Hawaiian Island Hardwoods, LCC
Reinventing the Timber Industry in Paradise
By Clay Clayton
In 2008, Jim Quinn presented the keynote address at the Wood Technology show in Portland, Ore. Jim recounted how he and his partners are taking on significant challenges as they work to reintroduce a working, viable forest products industry in Hawaii. Jim"s work has pertinence to the larger American forest products industry, which has seen on-going segmentation for much of the past two decades. The lessons Jim learns as he works to build the Hawaiian forest industry are transferable to the larger North American industry.
Applying Oregon Skills to Hawaii
Quinn is no stranger to rising to a challenge. In the 1990s, Jim Quinn was CEO of Collins Pine Company in Portland, Ore. On Jim"s watch, Collins received the President"s Award for Sustainable Development, and Jim received international awards for environmental leadership and industry "Man of the Year" recognition.
A few years ago, Jim"s environmental bent led him away from what was supposed to be a leisurely retirement in Hawaii to the establishment, with partners, of Hawaiian Island Hardwoods (HIH), a company bringing Hawaiian-grown hardwoods to the local, national, and international marketplace.
"Our vision is to use sustainable forest practices as one tool in restoring the forests of Hawaii to their former health," Jim says. "We believe all things grown or raised in Hawaii are special. With our plentiful sunshine and natural rainfall, the islands are a perfect site for beautiful trees to be sustainably managed and enjoyed by our neighbors and consumers."
Creating Specialty Products
While entering a small market with specialty products is something new for Jim, the endeavor borrows considerably from Jim"s past experience in a production sawmill setting. Today, HIH produces lumber from the recovered stems of dead and dying trees removed from the Hawaiian forest for health reasons. The firm produces "chain of custody" certified wood products and produces about 3000 board feet daily.
Two portable thin-kerf Wood-Mizer band saws are used to manufacture lumber while stable markets for that lumber are being developed. A SolarDry SG20 solar kiln system dries the lumber for use in furniture, flooring, and a broad array of specialty products.
Establishing a New Market
Jim is upfront about the difficulties a firm like HIH faces in establishing a new market –"from a pure business perspective," he says. "We have identified, and are in various stages of addressing, four essentials to profitably producing lumber here in the long term. Success will depend on adequate capitalization, utilization of quality production equipment, a reliable source of raw material, and gaining "partnership" with local residents and authorities. Other promising businesses here have closed their doors prematurely because they did not give adequate attention to one or more of these factors."
Jim puts forward that gaining partnership with governments and citizens means understanding what people"s concerns are, and in the long term, sharing those concerns and addressing the challenges raised by them.
Hawaii, the largest of the Hawaiian Islands, has been described as "a big island, but a small town" a reference to the close-knit culture and the difficulty doing business as an outsider. Longevity and building relationships, especially with the right people, are very important. Jim Quinn"s relationship with authorities at state and local levels has been established through his efforts to fund research and help publish reports related to a potential timber industry on the islands. Those reports help build credibility at the local level.
For some, cutting trees from any forest anywhere generates opposition. When the tree is "tropical" and the forest is Hawaiian, there can be increased negativity. That negativity, Jim says, has been fueled by lack of restraint in other countries and by prior practices in Hawaii including over-cutting, conversion of timberlands to agricultural uses, and a failure to foster reforestation.
To mill in a niche market equipment capable of producing lumber cut to exacting standards, recovering maximum value and yield and capable of being operated on a modest budget optimizes the chance for success.
Jim says that"s unfortunate because, "Hawaii"s forests, including endangered Koa trees, are easily reestablished and naturally re-propagate themselves when conditions are right. The forest industry is harmed because people see the lack of trees, and blame is placed on harvest rather than poor restoration."
That means, according to Jim, education is a vital element in reintroducing confidence and restoring timber harvesting to Hawaii. Jim"s research, conducted in partnership with the Hawaiian government, now forms a solid base upon which to build knowledge. The studies identify uses for Hawaiian woods, best practices for sustainable and healthy forests, and market potential.
Quinn"s third study, the "Hawaii Hardwood Market Study," assessed the Hawaiian market potential. A fourth study "Forest Industry Development Research" gathered yield data for four species available for harvest in Hawaii. (Both of these studies are available on the State of Hawaii DLNR website.)
To obtain the yield data, a local operator was hired to mill various species of logs into lumber using a Wood-Mizer LT40 hydraulic portable sawmill. Sawmills like these are easily moved and set up and, according to Jim, are currently the primary means of manufacturing most of the lumber produced on the islands. Their relatively low cost, mobility, ease of operation, and ability to produce smooth and consistent lumber make them ideal for niche markets like his.
The study revealed considerable unrealized potential from Hawaiian hardwoods. Believing that the challenges (also revealed by the studies) could be overcome, Jim and three partners moved ahead with HIH, first purchasing the Wood-Mizer used in the study, then building a small processing facility in an old sugar cane plant.
Today, HIH purchases logs from private land owners and bids on timber from state lands. Because Koa is listed as an endangered species, Koa logs are available exclusively through salvage of down, dead, or dying trees. Jim
hopes that with a little effort, the easily reproduced Koa will become common and be eventually viewed as a harvestable species.
Finding Future Profits
Jim says the cost of logs and logging in Hawaii is high, but the potential for profitability remains positive. All the species bring a good price. Koa is in high demand and brings a premium price for all grades. Figured Koa can bring $25 a board foot, and highly figured demands as much as $150 a board foot.
At those levels of value, Jim says, the thin kerf of the Wood-Mizer sawmills are valued as a tool for getting the most lumber from each log. With kerfs of about 1/8th of an inch, HIH is able to produce more highly valuable lumber from each log processed. Another advantage of the thin kerf blades is that less power and fuel are required by the 28 hp Kohler engines to convert the logs into lumber.
Rough lumber is manufactured, bundled, kiln dried, and processed to various levels of finished product, depending on demand. Plans are on the drawing board to respond to anticipated increases in market demand, and when justified, the existing facility will be expanded.
The lesson HIH has to offer the larger industry, Jim says, is that while many niche markets with extraordinary potential are available to entrepreneurs in the forest products industry, success in them can be elusive. However, he continues, those careful to develop approaches to the market that are in step with consumer and societal desires can succeed when products are processed with attention to both cost and quality. When these items are adequately addressed, it is possible to find substantial success in areas of the industry others may have given up on.