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December 2003 January 2004


Taking chipping into the woods

A move into in-the-woods chipping is expected to save Daishowa Marubeni’s Alberta operations $8 million a year and allow the company to realize more fibre volume off the same land base.

By Tony Kryzanowski

Daishowa-Marubeni Peace River woodlands superintendent Joerg Goetsch with chips produced by one of the Peterson Pacific DDC 5000-G portable chippers.

Daishowa-Marubeni International (DMI) is expected to substantially boost its bottom line by converting to in-the-woods chipping to produce the hardwood chips needed for its Peace River, Alberta pulp mill, joining the small group of Canadian pulp manufacturers who dare to chip aspen in this way. Once DMI’s contractors have fully deployed and commissioned nine Peterson Pacific DDC 5000-G portable chippers, the Alberta pulp manufacturer expects to save $8 million per year.

Using portable chippers to manufacture wood chips is not a new concept. Bowater Paper Co in Thunder Bay, Ontario also uses portable chippers for in-the-woods manufacturing of pine, spruce, birch, aspen and poplar chips. In fact, DMI developed its own system based on what it learned from Bowater’s experiences. However, during its investigation of in-the-woods chipping, DMI has helped to develop new portable chipper technology to improve on the difficult task of chipping frozen aspen.

So far, its contractors have put five chippers to work and are now actually achieving better chip quality from their portable chippers than what’s currently being produced in DMI’s wood room. “In the process of changing to portable chippers we took 12 full steps out of the chain from a tree being cut to the chips being deposited on our chip piles,” says DMI Peace River woodlands superintendent, Joerg Goetsch. He was the architect of the conversion plan. Once DMI head office executives in Japan gave their thumbs-up to the concept, they also asked if the conversion could be accelerated from taking three years to taking only two years.

One of the biggest costs to operating the chipping operations is the flail chains used for debarking. A chipper uses about 200 links per day, but DMI has negotiated a deal with supplier Woodlands Equipment to reduce the cost per link.

That is now underway, with shutdown of the wood room slated for April and full conversion scheduled for completion by October 2004. The 14 year-old pulp mill manufactures about 440,000 air dried metric tons of pulp per year, consuming about 75 per cent hardwood and 25 per cent softwood. Its hardwood component consists of 80 per cent aspen and 20 per cent black poplar. DMI has typically manufactured its own hardwood chips, while its softwood chips are purchased from area sawmills. Among the technical breakthroughs making in-the-woods chipping of aspen in northern climates more affordable was increasing the size of the sheave and knife system on the portable chipper. Also, the feed speed was reduced from 110 feet per minute to 80 feet per minute so that the debarking flail chains could properly debark the frozen aspen.

The DDC 5000-G is a combination delimber, debarker and chipper. Manufactured in Portland, Oregon, it is distributed in Alberta and British Columbia by Woodland Equipment Inc in Kamloops, BC. Other Canadian distributors include Wajax Industries for Manitoba, Ontario, New Brunswick and Quebec, and Wilson Equipment for New Brunswick and Nova Scotia. “One of the deciding factors of why we went with Peterson Pacific Corporation (PPC) was because of the very unique way that they do business,” says Goetsch. “They are not only interested in selling you a piece of equipment, but are also interested in how they can make that piece of equipment do the work you want better, faster, and cheaper. In addition, both PPC and their distributor continually stay involved and provide great after-market product support.”

For example, Woodland Equipment has established an inventory of spare parts through a local company called Bearing and Transmission. Rather than purchasing the portable chippers and operating them with their own staff or hiring companies solely as chipping contractors, DMI asked its logging contractors to add this function to their operations. All but one of the company’s logging contractors accepted their offer. With DMI and its contractors now so interdependent upon each other, the relationship between the two has changed from one of client and contractor to a true partnership, Goetsch says.

At a cost of $1.1 million per unit, this is Peterson Pacific’s largest single order of portable chippers to date. Additionally, contractors invested around $150,000 more for such items as spare parts and a grapple. DMI contractor and owner of All-Wood Fibre Ltd, Leonard Legault, applauded the pulp manufacturer’s gutsy move. His company has been in the chipping business since 1994, although Legault also has considerable logging experience. All-Wood Fibre owns four chippers including three DDC 5000 units and was instrumental in helping DMI through the testing phase that evaluated the viability of in-the-woods chipping of aspen. When DMI decided to proceed, All-Wood Fibre continued to support the initiative by hiring out its staff to other logging contractors to help them learn how to use and maintain the portable chippers.

While it was previously solely a chipping contractor, it has now invested in a log harvesting line to become one of DMI’s full-line contractors. “I believe this in-the-woods chipping method will be looked at seriously by other pulp manufacturers,” Legault says. “Technological advances in the portable chippers were an important breakthrough as far as delivering the chip quality and allowing for adjustments for different conditions. Everything has worked out well.” It takes two employees to operate and maintain the equipment properly. The chippers are high maintenance machines, requiring about six hours of maintenance for every 24 hours of production. One of the most costly items is the flail chain used for debarking. However, DMI has negotiated a deal through Woodlands Equipment to reduce the cost per link. The chipper uses about 200 links per day. DMI has factored in that cost as part of its logging and chipping rates for its contractors.

Another issue was finding a company willing to insure the portable chippers. That has not only been a problem for owners of portable chippers, but for all owners of forestry equipment. A number of insurance companies have stopped insuring forestry equipment altogether. However, after considerable discussion related to such issues as the chipper’s fire suppression system, the contractors have been able to get insurance. DMI’s in-the-woods chip manufacturing system has required changes to just about every aspect of the company’s harvesting, skidding, forest management, and delivery system.

Harvesting and chipping will occur on DMI’s tenured land from October to March. Contractors will be required to harvest wood only three days in advance of what the chipper can process to prevent bark from drying on the trees. Because the portable chipper produces a significant amount of debris, contractors’ skidders have been configured with a unique front grapple and a conventional rear grapple. This is so that the operator can take a front and back load of debris back to the cutblock, where it will be piled in a random pattern. Provincial forestry officials have approved this disposal method. Because DMI will no longer experience the eight to nine per cent fibre loss resulting from yard breakage, log debarking and chipping in the company’s wood room, and because the portable chippers can chip down to a two-inch stem rather than the four to six inches in the wood room, DMI anticipates that it will realize anywhere from six to 20 per cent more volume off the same land base.

A fundamental change to the chip manufacturing process at DMI is the delivery system. Typically, the company would deliver about 1.3 million cubic metres of wood in its yard during a 100-day delivery period, consisting of 33,000 truckloads of logs. Then, throughout the year, Wagner log loaders would remove the strapped log bundles and pile them on DMI’s log deck. Now, DMI has contracted nearly its entire delivery system to a company headquartered in Kamloops, Gold Star Transport (1975) Ltd, which will operate a fleet of chip trucks. They will dispatch these trucks to portable chipper locations as needed. While a typical 40-ton payload log truck would deliver about 44 cubic metres of wood in log form to the DMI yard, a 40-ton payload chip truck will deliver 57 cubic metres of wood in chip form. Plus, chip trucks can haul this payload on public roads year-round without being restricted by winter weight allowances.

One of DMI’s anticipated increased expenses in adopting this system is having to build roads to a higher standard. It has also spent $7 million to build a second chip truck dumper to complement the existing softwood chip truck dumper. DMI anticipates that the majority of log truckers whose services will no longer be needed will be those who typically came from southern Alberta and BC. Local log truckers will have the option of working for Gold Star and using their tractor trailers to transport chip vans instead of logs or continue to haul logs because of another aspect of this program.

During the same time of year that DMI will manufacture chips from its own holdings, it will transport logs harvested as incidental hardwood that it owns on land tenured to other companies. These logs will be transported to satellite yards. From April to June, the chip manufacturing process will move to the satellite yards. From July to September, the harvesting and chipping process will relocate to land owned by private landowners and First Nations communities wanting to clear land and eager to sell their hardwood resource.

Switching to in-the woods chipping to make DMI more competitive

Switching to in-the woods chipping will result in the loss of a number of log trucking jobs, as well as over 30 positions in DMI’s wood room. Woodlands superintendent Joerg Goetsch says this is his only personal regret about suggesting and implementing this change. However, this was necessary to safeguard the remaining 300 jobs at the pulp mill. DMI can no longer rely on the uniqueness of its long-fibred northern pulp because computer advances have made the use of short-fibred pulp in papermaking just as attractive. This has leveled the playing field between northern hardwood pulp producers and pulp producers utilizing faster growing eucalyptus trees, resulting in considerable competitive pressure on DMI. The savings anticipated from switching to in-the-woods chipping will make DMI better able to respond to these types of competitive challenges, making their operation more competitive.


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