the OSB boom
against a downturn, Weyerhaeuser invests $16 million to improve recovery at its OSB plant
at Slave Lake, Alberta.
By Tony Kryzanowski
Copyright 1996. Contact publisher for permission to use.
Weyerhaeuser Canada is confident a $16 million investment to
improve recovery and become more automated at its Slave Lake oriented strand board (OSB)
plant will secure its survival through what many predict as lean years in the OSB market
due to over-capacity.
When OSB prices were high in the early 1990s, it seemed everyone
was jumping into the market all at once, resulting in 25 new OSB plants coming on line in
North America in seven years.
OSB is replacing plywood as the construction material of choice,
particularly in the large US market, but not enough to absorb that volume of production.
In Alberta alone, Weyerhaeuser has had to contend with two larger
competing OSB plants within a short distance from Slave Lake: one built by Ainsworth in
Grande Prairie and one built by Tolko in High Prairie. Slave Lake produces about 210
million feet annually based on 3/8'' width. That is less than half the production of newer
competing mills rated at between 500 and 550 million feet annually.
Plus, the plant has already been mothballed once by former
owners, Weldwood, who, after investing nearly $20 million in the mid-1980s, shut the plant
down in 1990. After being shut down for nearly three years, Weyerhaeuser purchased the
plant from Weldwood in 1992 because of a robust OSB market at the time. Weyerhaeuser
gained about a two-year head start on their nearest competitors as a result of this
Initially, Weyerhaeuser spent $4 million and 14 months just
getting the plant operational.
"With market conditions being very strong, we spent the
money to get the mill back up with a quality product, just the way it was," says
Weyerhaeuser Slave Lake general manager Stan Nicholls. "Taking a look into the
future, we could see that with all the new capacity of OSB coming on line, we needed to
invest some capital to help reduce variable costs and to get us into a more competitive
position to face the market downturn."
"We take advantage of our marketing strength that way,"
says Nicholls. Given the incredible competition within the commodity OSB market, Nicholls
says Weyerhaeuser has a plan to move in other directions. "We are looking at doing
some different value-added products," he says, thus avoiding the standard commodity
market. But those changes are still down the road. The immediate concern was improving
efficiency at Slave Lake in a way that would not force the owners to shut the plant down
again. A total of 147 employees were counting on them. "
I believe to keep it viable in what I see as a very slow market
for the next few years, this money was critical for the long-term success of the
plant," says Nicholls. "My own personal view is that without this capital, I
really doubt that we would have been able to make it through the downturn. I feel very
confident that with the people we have and with the capital money we have, we will make
Weyerhaeuser is spending to improve its green end and slasher
process. The result will mean more automation, better recovery and about a 15 per-cent
work force reduction.
The company began trimming its work force last March, replacing
vacant positions with temporary employees. By the time plant improvements kick in, there
will be 20 fewer employees.
The plant consumes about 308,000 m3 of wood annually, consisting
of approximately 70 per cent white aspen and 26 per cent black poplar. It is harvested by
two private contractors from WeyerhaeuserÕs Forest Management Area (FMA).
Tree-length wood arrives at the Slave Lake plant and two or three
portable slashers operate 24 hours a day, seven days a week, to buck it into 8' lengths
before it enters the ponds. After soaking, the wood is cut into 22'' lengths, and then
passes through four different types of CAE waferizers to make furnish to produce OSB.
This system is part of the plantÕs original equipment, and has
several drawbacks. Firstly, portable slashers require a high degree of manual labour.
Secondly, the wood is not 100 per cent utilized. Nicholls says they currently have 2' and
3' pieces that end up as pulp chips.
"We felt in order to be competitive, we needed to have all
our fibre being utilized in our process to get our recovery numbers as close to 100 per
cent as we possibly could," says Nicholls.
Pulkkinen has spent considerable time touring other sawmills and
addressing AGAWA's main priority, that is developing a log profile from an extensive
inventory conducted on their Crown leases. They want to ensure that changes they make to
the mill will reflect their log supply. Among their findings so far is that they can
expect considerably more pulpwood and hardwood. They will harvest many more smaller and
larger logs than what historically were prime quality pine sawlogs.
They have decided to purchase a permanent, multi-saw slasher
system manufactured by Quebec City manufacturer Huot. "We travelled some miles and
spent some time in Quebec looking at different slashing systems," says Nicholls.
"Huot makes a very good slashing system, so we are looking forward to see how that
Because it will only run five days a week, 16 hours a day,
Weyerhaeuser will realize an immediate cost benefit. They have also purchased a 27''
Nicholson ring debarker. Now blocks and end pieces will go through the ring debarker and
enter the stranding process instead of ending up as wood chips.
The new multi-saw slasher will be operational by December 15,
1996, and the new strander will begin production in mid-March. About 85 per cent of
Weyerhaeuser Slave LakeÕs annual production is flooring material destined for the
American midwest, specifically the Utah area. But they are diversifying. Recently, they
shipped some product to Russia and are making some specialty products for a growing
This project is really just the beginning of changes contemplated
for WeyerhaeuserÕs Slave Lake operation. Nicholls says this capital project is being
implemented to survive the downturn. Eventually, the company may convert the plant to a
12' line if their wood supply can sustain it. Any production expansion will have to come
from their own forest resource, since Crown land surrounding their FMA is held by other
companies. Nicholls says they are committed to a sustainable forest, so they must be
careful not to over-produce beyond their sustainable annual allowable cut. Weyerhaeuser is
conducting a detailed inventory of their wood supply to see if they can manufacture OSB
from different wood species and if moving toward a 12' line is viable.
The plant started out manufacturing waferboard 21 years ago, and
was owned by a group of investors called the Alberta Aspen Board Association. Weldwood
purchased the plant in 1977, converted it to an OSB mill in the mid-1980s then mothballed
it before Weyerhaeuser arrived on the scene.
Waferboard pre-dated OSB as construction material, and is
manufactured by placing strands in a random orientation. On the other hand, OSB strands
are oriented perpendicularly to each other for added strength. It has found many other
specialty uses beyond the traditional waferboard applications of wall sheeting and roofing
because of its strength; one is as a component in floor joists.
Weyerhaeuser Slave Lake operates its process this way: Once wood
entering the plant is waferized, it enters two 12' X 52' triple-pass MEC drum dryers. It
then enters a rotary screen process to screen out fines, and is stored in dry bins. The
material proceeds to what Nicholls describes as an "old vintage" Schenck forming
line, featuring Durand equipment. The press is a 4X16, 24-opening Washington Ironworks
press. The trim line is a combination of Globe, Burelbach and Durand equipment.
About 70 per cent of production is shipped by rail. The rest is
trucked out. Nicholls says their Slave Lake OSB plant is very important to the town of
Slave Lake and the surrounding area. In addition to providing direct employment for 147
workers, they do a lot of business in the area and create many spinoff jobs.
Weyerhaeuser's plan for surviving in the short term, remaining
employees can be reasonably assured their jobs are safe for the foreseeable future.