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Eye on the Orient

Summary: With a confusing TimberWest/Fletcher Challenge ownership situation behind it, the Elk Falls lumber mill invests $16 million to retool for Asian markets.

By Ward Johnson
Copyright 1996 Contact publisher for permission to use

With much of the B.C. sawmill industry awash in fast computers and sophisticated new processing equipment, competition for the Canadian Lumber Standards (CLS) market is fierce. Many plants, especially interior mills cutting WSPF dimension, are specifically designed to cut CLS products — and they do a very good job of it. Producing for this market lends itself well to automation and high-speed processing and, with the large US market to the south, it is usually easy to sell everything a plant makes.

While mainstay CLS producers thrive on this market, older plants with inappropriate infrastructures and lay-outs, like some coastal sawmills, are unable to compete in CLS without building a completely new mill. For them, an attractive and viable alternative is export. The export market is a secure, growing market with consistent demands and good profit potential. There are few mills that don’t look hungrily at export from time to time, but it is not simply a matter of deciding to do export business. Like dimension, cutting export is a specialized process; it not only requires particular conversion capabilities and equipment in the plant, but also experience and expertise to produce the wide range of products and dimensions from the available log diet.

Perhaps an even more important factor in entering the export market is finding a sale for the products. Most export lumber is sold to Asian countries and developing a customer base there can be a long and complex process. Once a beachhead is established, the market is usually consistent and secure, but getting an initial foothold in this market can detour even the stoutest of heart.

One coastal mill that has successfully made the transition to export is the Elk Falls Lumbermill at Campbell River, BC on Vancouver Island. Owned by TimberWest Forest Limited, Elk Falls has been producing for the export market since 1985, when it switched over from CLS dimension. Late last year, the company completed a further commitment to export with a $16-million upgrade that improves breakdown and sorting capabilities. With the new infrastructure, this mill can now process more volume into a wider range of products and sizes, and do it all with higher recovery.

The first plant at this site was an old sash gang mill built in the mid 1950s. It operated as sash gang until 1978, when the present structure was built. At that time, Elk Falls was producing dimension, but by the mid 1980s it became obvious the plant couldn’t compete in the CLS market . After considering their options, management decided to pursue the export market instead. Elk Falls was then revamped and bega n p roducing direct - to - order products for Japan. Although much of the lumber destined for Japan is unplaned, this plant retained its planer and still produces planed material today. The Elk Falls plant has gone through considerable upheaval in the last few years. With the creation of TimberWest in 1993, former owner Fletcher Challenge decided to divest itself of its woods and sawmill operations. Along with other conversion operations, Fletcher Challenge spun off the Youbou and Elk Falls plants. As part of the new structure, Fletcher Challenge retained 51 per cent of the two plants, while 49 per cent went public. Other parts of the Fletcher Challenge empire were sold to Riverside and Interfor. As a result of its new situation, TimberWest began seeking a separate identity, which left CEP unionized tradespeople, who normally work in pulp and paper operations, straddled between the two companies. Eventually the dispute went to the Labour Relations Board for arbitration to determine how the two companies would operate.

The arbitrator decided the two companies were too integrated to function separately. This gave CEP trades people the right to remain with Fletcher Challenge or go with TimberWest. Of the 34 trades people involved in the sawmill operations, four elected to remain with Fletcher Challenge; the rest stayed with TimberWest.

Although the Fletcher Challenge pulp operation and the TimberWest sawmill are presently adjacent to each other, the properties have been separated and the plants now operate as separate entities. With the arbitrated situation, however, it is impossible to avoid all crossover. For instance, when a vacancy comes up it is posted in both operations and workers at both plants have the option of applying.

Despite the inherent difficulties, the TimberWest Lumbermill is establishing an identity of its own. This is a necessary step if the plant is to become an efficient, competitive operation. During the Labour Relations Board hearings, no money was spent on upgrading the sawmill facility. So, while the $16- million upgrade will result in a better, more efficient sawmill, it also represents a new, independent future for the Elk Falls lumber operation.

This most recent upgrade got underway in early 1995 and includes a new log merchandising system and kickoffs to improve gang-log sorts, a CNC scanning and double-length infeed system that commits the plant to small-diameter logs, two new optimizing edgers that replace an older optimized edger and a bandsaw, a new sorter and three-stage fence, new grade-mark readers, a new spray chamber for fungal treatment, and a host of new computers. Still in place are the Peco crane, which lifts the logs into the mill from salt water, two barkers and the cutoff equipment, and two gang saws.

First to be installed were the two new edgers. Shortly after work started in late December, a strike at the plant brought the entire conversion to a halt, so the first edger wasn’t running until April. Installation of the second edger was completed by the summer. Next were the new log decks and double-length infeed, which were installed in October. With the main equipment in place, the plant was now ready for the new Multimeg Electronique computer system. This system, which was developed in Quebec, is state-of-the-art technology that provides the flexibility and process control needed for export production.

Last to go in were the three-stage fences and sorters; while this equipment was being installed, mill-flow patter ns were changed as well. When Logging & Sawmilling Journal visited the plant in January, it was just coming up to speed. Plant Manager Ron McDonough explained that production was already up to 70 to 80 per cent of expectations, which comprises 480,000 board feet per day on a two-shift basis. The main product is Genban, but the plant also produces Nada, Moya, Sujikai, Mabashira, which measures 27 mm by 105 mm — a fat 2x4.

McDonough says the company has a good log supply: about half the required diet comes from company logging operations; the other half is acquired by trading with other companies. This mill is now primarily a small, coastal log mill and, although the CNC system will take logs up to 30'' in diameter, the company endeavours to keep the average at 11'' or 12''. McDonough says there is the occasional 18'' log coming into the plant, but most are smaller. Most of the wood is hemlock but, with all the new sorting capacity, the plant is planning to run Douglas fir as well. In anticipation, the new computer system has been programed to produce fir products. McDonough says 30 to 40 per cent of the hemlock is second-growth wood, while the rest of the log diet is old-growth tops. That gives a ratio of approximately 30 per cent second-growth and 70 per cent old-growth. The plant processes around 3,000 logs per shift.

When asked which change in the upgrade is the most exciting, McDonough responds without hesitation. “The double-length infeed and scanning system is the most significant,” he says. “We had an old Porter XY scanner before and, for its time, it was a good system. But the new scanning technology has true shape scanning and that ’s considerably better. “With true shape scanning,” McDonough says, “the log is first scanned, then the computer generates thousands of possible cutting solutions. When the highest-value solution is found, the computer rotates the log to optimize the solution, then rescans to set the saws.

This is done virtually instantaneously and the result is higher productivity and considerably better recovery.” McDonough says when the plant began cutting for the Japanese market, there was a 50 per-cent drop in recovery. “Export markets want full measurement pieces with square corners,” he says, “and, since recovery calculations are based on man-u fa c t u red dimensions with rounded corners, recovery is automatically lower when you ’re cutting export.

That difference makes it impossible for a mill to achieve the comparatively high recovery levels of a CLS plant.” McDonough is optimistic, however, that, with the new equipment and sophisticated computer system, the Elk Falls plant will show significant improvements. “We are already seeing a recovery improvement of 5.75 per cent at the mill level and we calculate that about 30 per cent of that gain comes from true shape scanning. Even though we are currently producing at only 70 to 80 per cent of capacity, we are already seeing a better overall economic picture at this plant,” he says, “and I’m convinced it’s due principally to value recovery from true shape scanning.”

McDonough says double-length infeed has made CNC the breakdown of choice. “ With this system, you can expect improvement in both recovery and production and those are two pretty important factors in mill economics.” McDonough expects the mill will recover the cost of the upgrade in about two years, provided predictions on improved grade recovery and production come to fruition.

April 1996 articles - Forest Expo Show Guide

  • New Deere Buncher
    Eastern and western contractors assess the new 653E.
  • Riverside Forest Products
    A $17 million upgrade produces a 12-percent recovery gain
  • OSB Fast Track
    Ainsworth opens its second OSB plant in as many years.
  • Caribou-Friendly Harvesting
    A look at a working study in BC's Chilcotin region.
  • Eye on the Orient
    With a confusing Timber West/Fletcher Challenge ownership behind it, the Elk Falls lumber mill invests $16 million to retool for Asian markets.
  • Unmasking the Eco-Myths
    Ex-Greenpeace activist Patrick works these days to counter the forestry myths and misinformation put forth by radical environmentalists. Most don't have a clue what they are talking about, says Moore.
  • Ancient Enterprise Still Thriving
    The oak forests and processing industry of France predate the Romans. LSJ's peripatetic editor Reg Barclay takes us inside a highly efficient plant in Burgundy, France.
  • Diploma Mill with a Difference
    A Crestbrook Forest Industries program that combines on-site industrial training with high school completion courses is well-accepted by employees.
  • Marketplace: Supplier NewsLine
    Equipment information including the Implemax Equipment skid steer grapple, the Dynaweld detachable trailer model, the Imac PowerSwivel, the Morbark Model 1300 Tub Grinder, and more.
    This month: Kiln controls including Drystar Computer Kiln Controller, Winkiln Control System, Custom Dry Kiln PLC and more.
  • New Era in Bush Communications
    Forest companies working in remote locations will welcome TMI Communications' new mobile satellite communications network.

    Return to the April 1996 - Table of Contents

Last modified 6/10/96

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