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December 2006 / January 2007 - The Logging and Sawmilling Journal

 

BC CONTRACTOR PROFILE

RIDING THE WAVE OF COASTAL LOGGING

Logging contractor Malaspina Enterprises has been able to ride the wave of changes hitting the BC coastal logging industry, and has even expanded into full phase logging and set up a separate processing business.

By Paul MacDonald

In the business world, sometimes if you’re not moving forward, you’re moving backwards. It reflects the view that if your company isn’t progressing and making changes, you’re going to get passed by—by the industry and your competitors.

The coastal BC forest industry could be a case in point. In the last several years, the industry has undergone dramatic change, with contractor consolidations, mill closures and a huge move to contracting out harvesting work by the major forest companies. Logging contractors on the coast had to change to survive.

Malaspina Enterprises, of Powell River, BC is one coastal contractor that has ridden this wave of change successfully. The company has not only expanded into full phase logging in the last three years, it also recently set up a separate processing business— Loggerhead Processing. “Going full phase was something I wanted to do for a few years and the opportunity came along,” says Darren Brown, president and owner of Malaspina Enterprises.

“But I never really thought we would go from 15 employees to 60 employees in three years. In some ways, it just kind of happened. An opportunity came along, we bought a piece of equipment, then another opportunity came along, and we went into the processing. It really just evolved.”

While they may be fairly new to the processing side, the Brown family has been involved with the coastal logging industry for more than 30 years. Darren’s dad set up Kip Brown Trucking in 1964, to haul for logging outfits Pacific Thinning and Olympic Forest Products. And that work has grown over the years; this year, Kip Brown Trucking, with its 29 trucks, will haul 500,000 cubic metres, primarily for those two companies, mostly around the Powell River area.

“Going full phase was something I wanted to do for a few years, and the opportunity came along,” says Darren Brown (above), president and owner of Malaspina Enterprises.

The full phase contracting and processing work, for the most part, is done across Georgia Strait, on Vancouver Island. Malaspina’s customers include Western Forest Products, Interfor, TimberWest, and others. “There’s basically a multitude of companies that we do full phase logging for,” says Brown. When the year comes to a close, Brown expects they will have done 350,000 cubic metres on the full phase side, working double shifts, seven days a week.

Expanding this quickly has brought its share of pressure and challenges, reports Brown. “It’s been a lot to take on, but it’s been challenging. There have been days when you wonder about it, but then it’s that way in any business, I imagine. We have a really good core group of people, and that takes a lot of the pressure off me. If it wasn’t for that core group of people, I would not have expanded like we have.”

Overseeing things on the Vancouver Island side of operations are two woods foremen and a trucking foreman. “That works well for the company and for me—it means I can spend less time on BC Ferries going back and forth to the Island.” He tries to get out to each logging operation once a week, however.

The core group now includes Fred Wiley, Brown’s partner in Loggerhead Processing. Wiley is a veteran on the log processing side—he got his start in the BC Interior, doing cut-to-length work around Williston Lake in the early- 1990s, when cut-to-length was still new to the province, before he moved to the coast.

Early in 2006, Loggerhead bought its first processor, a 325C from Cat dealer Finning, and quickly bought two more. The company now has the 325C Cat with a 624 Waratah head, a 330B with a 624 Waratah and a Madill 1800 with a 622 Waratah.

The Waratah heads have worked out well for him, and for Loggerhead, says Wiley. He has clocked 18,000 hours on Waratah heads, and that’s just from his work on the coast. “They really are a durable and strong head.”

The Waratahs have since been doing a lot of work for Loggerhead, reports Wiley. “Things have been very busy on Vancouver Island this year.”

While Wiley’s preference would have been to stay small, with one machine, they really had to seize the business opportunities when they were presented.

The equipment line-up at Loggerhead Processing includes a Cat 325C equipped with a 624 Waratah head. “As far as we’re concerned, Waratah is the Cadillac of processing heads,” says Darren Brown.

“It would have been nice to stay small, and keep our costs low. Being big is not always the best. But as a business, we had to move to take on the wood. And being in partnership with Darren and Malaspina has worked out really well.” If things go as planned, they will have processed 500,000 cubic metres by the end of the season.

They’re generally working in second growth, but have a fair bit of smaller old growth, as well, Wiley says. “Some of it is bigger wood that has to be handbucked before we can handle it—the fallers might take the first 41 feet off.”

As with Loggerhead, a major task in Malaspina’s expansion has been ramping up things on the equipment side. They started out doing some contract hoe chucking work with a Cat 332 machine.

Business grew and they purchased another 332 for hoe chucking. “We’ve had good luck with the Cat and Madill
equipment—it’s done what we’ve wanted it to do—sometimes more, depending on the operator.” Brown, like Wiley, has praise for their heads. “As far as we’re concerned, Waratah is the Cadillac of processing heads.”

This past May, they picked up two grapple yarders, both of them Cypress 7280 machines. Brown deferred to processing veteran, and partner, Fred Wiley for equipment on that side. But he was very involved with purchasing all the other equipment. He looked at a broad range of machines—and also asked employees for their input.

“I’m not the one sitting in the cab,” he says. “A simple question to an operator will tell you what someone thinks of the equipment or a certain grapple.

“And it’s the same thing with the trucks we buy. We talk to our mechanics to make sure the trucks will do what we want them to do.”

Having good equipment is certainly at the core of any good logging operation, but having good people operating that equipment is just as important, says Brown. “When it comes to production and taking care of safety, they make it all happen.”

Of course buying all this equipment is one thing, and making sure it is properly maintained is another. But Malaspina Enterprises and Loggerhead Processing are well set up for that. Brown comes at this side of the business with a lot of knowledge: He entered the coastal forest industry as a heavy duty mechanic.

“I then started working in the family business after I got tired of laying in the mud for a few years,” he jokes. “But as far as the maintenance of the logging equipment and the trucks, I think we’ve got a pretty good handle on that.” Overseeing things at the shop in Powell River is master mechanic Ken Ruedig, who has been with the company for 33 years. “He knows every single part on our trucks,” says Brown.

The company has been involved with the trucking side of the coastal forest industry for more than 30 years. This year, Kip Brown Trucking will haul 500,000 cubic metres with its 29 trucks.

Malaspina has computerized maintenance records to keep track of the growing equipment fleet. “We do an equipment cost analysis on every single piece of equipment, every single truck we have,” explains Brown.

“We have it all down. If a truck is costing us too much money for maintenance, we know that it’s time get rid of it or review who is driving the truck, or how they are driving the truck.

“The life of our equipment all goes back to maintenance and looking at the records. We know, month by month, how much it is costing us to run a piece of equipment.”

There’s no magic number—in terms of age or operating hours—to retire equipment. “A truck could have 20,000 hours on it and still be in good shape, so we’re going to keep it.” Included in their trucking fleet are a number of vintage Hayes trucks that just seem to keep going—and going. “They are just awesome,” says Brown.

Supporting the maintenance effort are scheduled oil samplings, which give them full details on equipment engine components—and a head’s up on potential problem areas. “With the oil samplings, you know when to start looking for potential problems. If you do them regularly, you’ll know what is coming up in terms of major maintenance,” says Brown.

The business is very competitive now, Brown adds, and margins can be thin, so equipment costing information is essential. “There’s no margin for forgiveness. You really have to have all your ducks in a row to make sure you are making enough money to make the business work.”

Running all the trucks and equipment requires a substantial amount of fuel. Like all logging contractors, Malaspina has been faced with the sometimes yoyoing fuel prices, with most of that time, the yo-yo headed up, meaning even higher fuel prices. To be more efficient, they re-engined some of their logging trucks several years back and now have computerized Cummins engines. “There’s not much you can do about it,” says Brown. “If you’re running the equipment, you need the fuel. But we try to be as efficient as possible.”

There are signs these days that the coastal industry is continuing to change. With a reduction in the number of logging contractors in the last few years, forest companies have sometimes found it hard to get contractors to bid on work. “I know of situations where 10 bid packages have gone out and the company may get two bids.”

This trend is positive, notes Brown. “At one time the rates may have been too high, but the last couple of years it has been a real grind. There has to be some kind of happy medium when it comes to rates.”

The bidding is going to continue, but Brown notes that the forest companies are also increasingly looking at opting for negotiated rates for some work. “I expect we will see more of that. It sure helps us plan the work out better,” he notes. “And while the companies may not get the cheapest price, they are guaranteed to get their wood.”

In spite of the growth the company has seen in the last few years, Brown notes that they may take on further opportunities. He’s mindful of the need to move forward. “We’re going to let things settle in for a while. We’ve grown so much that we could stay with what we have now for five or six years. But there are opportunities out there, and I can see us growing more.”

In terms of coastal contractors, getting bigger seems to have been the way to go in recent years. “It looks like the days of the ‘mom-and-pop’ size logging operations are coming to an end. The contracts out there are often for 100,000 cubic metres and they want it in three months. It would be hard for a small operation to meet those requirements.”

While Brown sees growth ahead, he does not want to be a mega logging contractor, like some on the coast. That’s too big for his liking. “I don’t want to get to the point where you see one of your pick-ups go by and you don’t know the person who is driving it.”

And going bigger would likely mean spending more time in the office—not exactly Brown’s favourite place. “It probably drives the office staff a little crazy because they have to track me down, but I don’t spend a lot of time in the office. I like to get out in the bush and walk the blocks.”

 


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