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December 2006 / January 2007 - The Logging and Sawmilling Journal

 

COASTAL CONTRACTOR PROFILE

LINKING UP WITH FIRST NATION

CRB Logging is building on its past successful relationships with First Nations groups, taking on forest management of Tree Farm Licence 38, which the Squamish First Nations has purchased from forest company Interfor.

By Paul MacDonald

 

The logging industry on the British Columbia Coast has been facing its own set of challenges in recent years. The forest industry as a whole has had to deal with industry-wide issues, such as the softwood lumber dispute, which is now resolved to almost no one’s liking. But the coastal industry in BC continues to struggle to find markets for the huge supply of hemlock on the coast.

And then there are the uncertainties created by the provincial government’s move to claw back some of the timber supply that was allocated to major licensees, in an attempt to diversify BC’s tenure structure. Out of this last challenge, however, has come opportunity. Part of that timber supply from the clawback has now been made available to First Nations groups—and, in turn, created business opportunities for contract loggers.

For some loggers, working with First Nations is brand new, while others have a long history of working with bands in their operating areas. CRB Logging of Squamish, British Columbia, falls into the second group, with a successful track record of working with First Nations bands on the coast.

CRB first got involved with the Mount Currie Band Council— based in Lillooet, northeast of Vancouver—some 20 years ago. That fact isn’t surprising when you consider CRB Logging itself has been around for more than 50 years.

“We’ve been talking with the bands over the last few years about what was going to happen, that there was going to be a push on to secure timber rights, and about what is going to come out of the treaty negotiation process,” explains Steve Miles, one of the partners in CRB Logging. “We talked about how they could be prepared for when that happens, so they could take full advantage.”

Currently, the company set up by CRB and the Mount Currie Band is still involved with forest management, but it has evolved and is now doing construction of ski runs and trails related to the Vancouver 2010 Olympics.

The most recent evolution for CRB Logging also involves a First Nations group, and has seen the logging company take on forest management of Tree Farm Licence 38, which the Squamish First Nations purchased from forest company Interfor.

“We’d been talking with the Squamish Nation about some other things, mostly about the cut the band was going to get as part of the provincial government clawback of timber rights,” says Miles. “They decided we were a good fit for them, and that we would look after
managing their cut. Meanwhile, they had also come up with the idea to buy TFL 38—it happened really quickly.”

The deal saw the band’s Northwest Squamish Forestry Limited Partnership purchase TFL 38—located northwest of Squamish and with an annual allowable cut (AAC) of about 110,000 cubic metres per year—for $6.5 million in 2005.

“We started to do the due diligence for them on the TFL deal, and then things ramped up. They bought the TFL and we’re now working with them as their management group.”

The log sort (above) at Squamish is especially important since the financial numbers dictating how everyone does in the venture is directly tied to the revenue that comes from the sale of the logs.

It then fell to CRB to ramp things up on the forest management side with TFL 38. Hampering things was a long winter. “And then we went from that almost into fire season,” says Miles. “It didn’t give us a whole lot of time to get things running, but I think we’ve been able to do a fairly good job so far. We’re going to have a very busy winter season coming up, market dependent. We’ve got a good logging system in place with our operations in the north, and with the TFL in the south.”

CRB’s role for TFL 38 is that of forest manager—it does a limited amount of logging work. Most of that is carried out by Elaho Logging, under a Bill 13 contract.

Having the background of being involved with First Nations has proven helpful to CRB—and some other logging companies are looking to adopt or model their relationships in a similar way, says Miles. “There are a lot of people out there trying to set up these business arrangements—it’s a key area for the coastal industry these days,” he adds. One piece of advice he has for loggers looking to get involved with First Nations groups is to steer clear, as much as possible, of the politics.

“There are always going to be politics involved with First Nations bands and sometimes we get drawn into it a little bit. But it’s best to stay away from that,” he says. Especially when it comes to an overlap of land, or timber. “The First Nations bands really need to work that out on their own. And when that’s done, that’s when we come into the picture offering logging or forest management services.”

CRB takes the approach of offering professional forest management services, but it does so on a results-based basis. “At the end of the day, if we don’t make money for our partners or clients, we don’t make money,” explains Miles. “Our whole approach is if we do well—from the fallers or chokermen in the bush to our First Nations partners to us selling and sorting the logs—then we all succeed.”

The concept they’ve followed is that of a limited partnership, with CRB entering into a management agreement with the band, and the band owning any forest assets. Agreements generally run for five years, about the length of a business cycle, with options to renew or extend.

The process and logging activities are very transparent in that individual block reports are prepared and supplied to the band. An important part of the agreement is that CRB helps the band to capacity build, with the number of First Nations members working in the venture growing.

Miles says it is also important to manage expectations. “Sometimes there is a thinking that the coastal forest industry is the goose that lays the golden egg and everybody is getting rich.”

“The coast has been under siege, but we don’t see it as a sunset industry,” says Steve Miles of CRB Logging. “It’s created new challenges and we’ve risen to them with new business relationships.”

First Nations Bands have seen their share of shady characters and opportunists, he notes. “In the past, some people have come to the bands and said ‘Give us the land. We’ll create all kinds of jobs, everyone is going to make big money and drive big pick-up trucks.’ That’s just too good to be true.

“What it comes down to is that there can be a good living doing it, but you have to work hard, work smart, be patient, and it’s all about sustainability.” Key to all of this, of course, is the logging side. As much as possible, it should be a well-oiled machine, with the work done
by, of course, well-maintained equipment.

“We’re not getting more money for our logs than anyone else, but we’re trying to do things more efficiently.”

They work to have a good match of equipment for the logging they are doing, but to also be flexible. “You need to have the planning done quite a bit in the future, but maintain flexibility within that plan so you can adapt to the markets. We may want to get from A to B, but it won’t necessarily be a straight line—there are stumpage changes, government policies change and markets change.”

Log markets drive their operations. While some of their roadbuilding may be done ahead, Miles says, the logging itself is tied as closely as possible to market conditions. “If the trend is seeing cedar going up, we’ll concentrate on producing cedar blocks. We want to hit the right markets with what we are harvesting, rather than fall and process wood and then see a market fall flat.”

The three principal areas of the company—marketing overseen by Miles, the logging managed by Paul Turner and the financial side overseen by Bryan Shier—work closely together. “At the end of the day, we have a responsibility to get the cut off in a sustainable way and to do it profitably.”

On the logging side, Turner notes the company is working almost entirely in steep slope areas. “We do some hoe chucking, but we’re usually doing high lead and we do some heli-logging,” he notes.

They have a Madill 124 grapple yarder, matched up with a Hitachi 400 backspar, as well as a Hitachi 480 log loader and a Madill 3800 log loader. A Deere 992 does the hoe chucking. On the road building side, they have a Hitachi 450 backhoe, which is new this year, a second 450, a Cat D-8, two Cat rock trucks and a Traxxon rock drill. At the dryland sort, they have a Wagner L4130 stacker, three 966 Cats and a Hitachi 400 log loader.

A Hitachi EX400LL log loader at work (right) in the Squamish log sort.

In terms of the logging and road building equipment, Turner says they try to keep good tabs on when logging or a road project is wrapping up in an area, so they can move the equipment as quickly and efficiently as possible. With the highway hauling, he notes, there are restrictions on when they can haul that they have to work within.

While CRB has some new equipment, Turner says they have a strong focus on the preventative maintenance side, to get as much life—and uptime—out of their equipment as possible.

“We try to stay on top of things,” he says.

They have two shop trucks to handle maintenance out in the bush. “If there are major repairs to be done, we try to get the equipment in the shop and do it during our less active times.” They carry out scheduled oil sampling, which Turner says is helpful.

“It can give you a head’s up on possible problems.” Handling all this are two shops, at Pemberton and Squamish. The main shop in Squamish sees most of the work, and has a shop foreman, one general mechanic and two truck mechanics.

They have a total of 13 logging trucks, including three new Kenworths this year. “Trucking is a big part of CRB because our wood has to travel a fair distance,” says Miles.

“Certainly harvesting and yarding is part of the business, and we’re good at it, but our strengths are in road building, hauling and running a dryland sort to sort the wood properly.” A separate company, Garibaldi Forest Products, has been set up to run the dryland sort in Squamish.

The sort is especially important since the numbers dictating how everyone is going to do in the venture is directly tied to the revenue that comes from the sale of the logs. And that is Miles’ specialty.

He joined the company after working for log broker, the Probyn Group.

While CRB has some new equipment, it has a strong focus on the preventative maintenance side to get as much life—and uptime—out of its equipment as possible.

The efforts to get First Nations members involved has worked well in that a number of their truck drivers are now from the band. “It’s a good way to bring people into the business,” says Miles. He adds it is difficult to find people in the booming Sea-to-Sky Corridor that runs from Vancouver up to Whistler and includes Squamish.

Miles says there will be other joint ventures with First Nations in the future for CRB, noting they are seeking out additional timber through forest licences, with the band being the owners and CRB being the forest managers. The next step from here could be keeping some of the timber in the region and setting up manufacturing facilities.

Miles sees it all as part of the changing dynamic of the coastal logging business. “The coast has been under siege for 10 or 15 years, but we don’t see it as a sunset industry. It’s just created new challenges, and we’ve risen to them with new business relationships.”

That said, they realize where their strengths lie—in logging and forest management in this region of the BC Coast. “We’re not out to be a Canfor and be everywhere and do everything. We want to make sure we keep our focus.”

 


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