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February 2004

BC COASTAL LOGGING

Looking long term

Although coastal sawmilling in BC is currently struggling, sawmiller J S Jones is looking beyond the current difficulties and is thinking long term with its new $30 million small log facility in Surrey.

By Paul MacDonald

At a time when the BC coastal forestry industry continues to face significant challenges—due to lacklustre markets in Japan and the US countervail—Dick and Tom Jones have to receive full credit for looking beyond the current difficulties, and seeing the future of coastal sawmilling. The result of that vision is a new $30 million sawmill on the banks of the Fraser River in Surrey, BC. The company owned by the two brothers—J S Jones Timber Ltd—opened the mill this past fall, and it was quick to ramp up to cutting 85 per cent of production capacity. The new mill marks a watershed in the industry in that it is the first new major sawmill to be built on the coast in a very long time.

The mill has been specifically designed to handle smaller second growth timber on the BC Coast. Even though the new mill uses mainly used equipment, J S Jones relied on the services of a number of core suppliers—including Optimil—to help link the equipment together and get it up to speed.

In recent years, the coastal industry has been all about mills closing, not new mills opening. The mill is different, too, in that it is specifically designed to handle smaller second growth timber, rather than the large old growth wood that has been the mainstay of mills in this area of BC. It’s a smart move considering there is going to be more and more second growth wood, and less older growth timber. Mill manager Dan Dewar explains that the new mill was designed with the overall goal that production should be extremely flexible. “If we want to be in the North American lumber market, we can be there.

If we want to produce for the Japanese or Australian markets, we can do that. And if we want to combine all of that in a day’s production at the mill, we can do that, too. “The idea is to get the broadest production and return from the investment in the mill and from the logs. We don’t want to be stuck producing for one particular situation or market. The mill was set up so we can move into or out of markets. “Basically, we want to be diversified enough that we can take advantage of all the markets.

That’s really what this new mill is all about. And we believe there is an abundance of small fir and hemlock that will be available to us to do that.” About 50 per cent of that timber is coming from the company’s own operations on the coast. It has timber rights in the Fraser Valley, the Fraser Canyon, and the Queen Charlottes. The balance is purchased wood. Illustrating the focus on smaller wood, the mill can handle as small as a four-inch top through to a 10-inch top. Even though the project cost $30 million, that budget figure could have easily been doubled if the Jones brothers had not been resourceful. Instead of buying all new equipment, and having to bump up the dollars, they elected to source most of the mill equipment through mill sales and auctions.

There is little in the way of new equipment on site. At the front end, logs are run through a single 22-inch Nicholson debarker and an SKS designed cut-off saw system, an area which could see additional equipment once the mill is fully ramped up. “Our plans are to eventually make some changes to that area to improve recovery and production, but our focus right now is on getting everything up to production capacity,” says Dewar. They can put up to a 22-inch log through the Optimil canter, with cants then sent through to a McGeehee gang saw. The canter line is optimized with software from Porter Engineering, determining what the best cut is based on the wide markets the mill has. “Our production primarily follows that route,” says Dewar. “If we want to cut to a different size or turn out a different product, we can kick it off and send it to the bull edger.”

Production capacity of the new Jones mill is 300,000 board feet a shift, and it currently operates on a two-shift basis. The approach behind the new mill is flexibility, giving it the option of producing for a variety of markets, focusing on the markets that offer the best return.

The Flare International combination bull/gang edger, one of the few pieces of new equipment, can take up to a 12-inch cant. There is also USNR resaw equipment and further along the process are a Schurman/USNR optimized edger and Newnes trimming equipment. The production capacity is 300,000 board feet a shift, based on dimension lumber. The mill is initially running on a two-shift basis, with about 60 employees, including support and maintenance staff. The Jones people spent a good deal of time sourcing all the equipment, and it was done in a well co-ordinated—and selective—way. “It’s used equipment, but it’s not old equipment,” notes Dewar. “Going the used equipment route wasn’t something we had to do, but it makes sense in terms of economics,” he explained. “There is a lot of iron out there in the market, but it had to be in good shape because we wanted to be able to run, and run well with this mill.”

The challenge with any new facility is tying all the equipment together, and that can be even trickier with used equipment, which comes from a wide background of different mill set-ups. While there was the initial close scrutiny and consideration when the used equipment was purchased, the real work began in planning it all out and installing the equipment in the mill. “We hashed things out, like lumber flow, many, many times before we actually started to put equipment in,” explains Dewar. It’s a lot easier to reconfigure equipment on a blueprint, than it is on the shop floor, he notes. “We wanted to really think things through in terms of having equipment set up a certain way, not only in a particular part of the production process, but with the entire mill process itself.” “Doing the initial mill layout and design ourselves, using Computer Aided Design software, allowed us the time and freedom to investigate many layouts and find the one that we believe will work the best and allow for future expansion,” added project manager Allan Bose. “In this market you have to get it right the first time.”

Besides using expertise from the supplier side, the company relied mostly on in-house staff for the project, which was about a year in the works. J S Jones has good people both on the log supply side, with extensive coastal operations, and on the mill side, having run mill operations for a long time. Besides Dewar, the core group included company vice-president Chris Jensen, project manager Allan Bose, maintenance superintendent Doug Carey, millwright supervisor Harm Boparai, electrical supervisor Lorne Rempel, production superintendent Derrick Faulkner and purchaser Bryan Lewis.

On the same property as the new mill, the company runs a conventional large log, headrig operation—Stag Timber—and a cedar shingle/shake mill, as well as remanufacturing operations. Even though the three mills have different concepts—the pre-existing two mills being focused on old growth and the new mill on second growth—there may be an opportunity to tie them together at some point, to share log supply on a limited basis and gain some efficiencies. There may be times when the new mill has logs that are too large, and they could be kicked over to the Stag mill, for example.

The three mills have a large site on the Fraser, but since they are sharing it there is not a lot of room for storing lumber. Most of the new mill’s lumber goes from being strapped straight out to being loaded on trucks, which transport it to various local planer mills. Using almost all used equipment brought its own set of challenges, but none that they could not overcome, says Dewar. The project has gone quite well, he added. “Through all the experience we’ve all had in working in different mills, we’ve worked things out and were able to come up with a pretty good plan and it seems to be working well. “There are still some changes we are going to make, but they are minor, such as a roll case having to be set up to go a different way.

The production is a lot smoother than I anticipated.” Getting things up to that magic 100 per cent capacity, from the current 85 per cent, might involve changing the infeed a bit, he suggests. Once they get that remaining 15 per cent, however, they will not be sitting pat. “In this market, you can’t stand still or your competitors will go right past you,” says Dewar. “You have to keep moving forward to stay successful.”

The company recognizes that while they have been careful in choosing the right equipment, and are serving and developing what they feel are the right markets, it is still going to be a tough haul. That’s simply the way the industry is right now. “We have to put a lot of thought into our runs and figure out which is going to deliver the most revenue,” says Dewar. “There is not a whole lot of room for profit in the markets right now, but because we are flexible enough,we should be able to put together a cutting program that’s viable for the markets at any point in time. “The beauty of this sawmill is that we are not stuck with producing one thing. If the market is down, normally you might be forced to shut down or stockpile. We won’t have to do that. We’ll be able to look at things and if this market is not bad, and that market over there is okay, we’ll combine them. And at the end of the day, we should be able to keep operating.”

Dewar says the most challenging part of the project has been cutting for this diversified market structure, and at the same time achieving reasonable production levels. “That has been the main challenge.” As of late last year, there were plans for further additions to the mill once they had settled in at production capacity. There has been discussion about adding another line—there is plenty of room in the current facility to do so and the layout was done in conjunction with the first line. However, all of this may depend on whether the proposed new softwood lumber deal with the US goes ahead.

Preliminary details about the deal state that production will be allocated to companies and mills based on their production in the last two years. Where this leaves new mill operations, such as J S Jones, remains to be seen. On the supply side, however, Jones announced in late-January that it had reached a deal with TimberWest Forest Corp for TimberWest’s Tree Farm Licence on southern Vancouver Island. The deal will give Jones access to 400,000 cubic metres a year of second-growth and old-growth timber on the Island. Much of that timber is expected to be used in the new mill.

Core suppliers linked mill together

While the new J S Jones mill uses mainly used equipment, it relied upon the services of a number of core suppliers to help link the equipment together, and get it up to speed. These included Optimil which supplied PLC programming and mechanical set-up, Coe-Newnes which did trimmer optimizer programming, Lucidyne which did sorter control, USNR-Perceptron who handled optimized edger programming, and Porter Engineering which did the canter line programming. SKS Engineering handled the mechanical aspects of the project and were structural engineers. Gravelle Mechanical Contracting did the main mill mechanical installation. ISM handled the building erection and log end steel fabrication. Kay-Son Steel Fabricators did the main building steel fabrication. A C Nelson and Forest Electric handled the electrical installations. Pottinger Gaherty were environmental consultants. To complete the job on time there were approximately 25 contracting companies on this job and the J S Jones staff acted as the general contractor and coordinator of their efforts.

 

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