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February 2005  - The Logging and Sawmilling Journal

MILL PROFILE

Strong focus on PM

BC independent sawmill Galloway Lumber has a strong focus on preventative maintenance, and tweaking its equipment to keep the operation efficient.

By Paul MacDonald

The lumber business can be a lot like hockey—you need a combination of both offense and defense to make a successful team. NHL great Johnny Bower knew all about defensive hockey. The workhorse goalie of the Toronto Maple Leafs won the Vezina Trophy as the league’s best goalie during the 1960-61 season. Bower later helped the Leafs win four Stanley Cup Championships and was immortalized in Hockey's Hall of Fame in 1976. Bower did not make it to the NHL until he was nearly twenty-nine years old, proving that you don’t have to be young to be good. An autographed picture of Bower, along with those of other hockey greats Bobby Hull and Guy Lafleur, hangs proudly in the meeting room of Galloway Lumber in southeastern BC.

The company’s general manager, Bud Nelson, is a big hockey fan. Without stretching the comparison, you could say that there are similarities between Bower and Galloway Lumber. Both are definitely low key. Bower had to tough it out through a variety of injuries, and Galloway, like most medium-sized sawmills, has had to tough out in markets the last few years with the countervail that has been slapped on lumber shipped to the United States and a rising Canadian dollar. Almost all of its lumber goes directly to the US market. The mill sits on the side of Highway 93, only about a 15-minute drive from the border. And like Bower, Galloway Lumber has had to be resourceful with its equipment.

It was said that Bower made his goalie pads from an old mattress, and his dad would look for suitably crooked tree branches to shave into sticks. He persevered and refined his game to become one of the best goalies of all time. These days Galloway is making the best of what it has; the last major equipment addition came back in 2000. And the mill is not a youngster. Although there would be nothing left from that time, there has been a mill on this site in Galloway since the 1920s. “We’ve been a sawmill town since way back,” says Bud Nelson. “And it’s a fairly old mill.”

The upgrade in 2000 saw two infeed lines combined to one, with the installation of a Linden singulator, a Nicholson Tandem A7 debarker and a Nicholson SS30 high speed automated cutoff saw system. In the mill, they have a conventional chip ‘n saw and chip ‘n edger set up, with a three-saw push/pull trimmer, and a 50-bin sorter. This is teamed up in the planer with a NMI moisture density sorting system, a Stetson-Ross unit with 20-knife top and bottom heads, a Newnes tilt hoist, Stetson-Ross auto-trimmers and a 40-bin sorter. There are two older kilns, both of them Salton.

Since the upgrade, they have been tweaking the equipment, here and there, explains Nelson. “We’ve been doing bits and pieces of upgrading. The situation with the countervail has lasted a lot longer than we thought. Over the last while, it seemed like every month there were new developments, and it might be settled. So with the situation with the US continuing, we’ve just been keeping our head down, and working with what we have.” But they’ve also had a strong focus on maintenance and preventative maintenance to keep mill equipment in reasonably good shape. “PM is very important for us,” says Nelson.

These days, the mill is running at about 80 per cent capacity, and turning out about 40 million board feet of dimensional lumber a year, mostly from local lodgepole pine. “We’ve been cutting those numbers for a while,” says Nelson. “We didn’t really increase production with the last equipment upgrade. It improved our efficiency rather than increasing our production.” They are generally running one shift, although from time to time they will shut the planer down, and go to two shifts on the mill. It’s kind of a balancing act between the planer and the mill, says Nelson. You could say the planer is just a little too big, production-wise, or you could view the mill as just being a bit too small. Galloway has their own quota, which supplies a good part of what they need, but they also purchase private wood, as well.

Since its last major equipment addition five years ago, Galloway Lumber has been doing smaller equipment upgrades here and there in the mill, and is also emphasizing preventative maintenance. “PM is very important for us,” says Galloway general manager Bud Nelson.

The harvesting is mostly done with four local contractors, JR Blackmore, Chill Logging, Featherling Contracting and Bren-Kar Logging. They are doing conventional cut and skid, but there is also some high elevation tower logging. The contractors harvest about 130,000 cubic metres a year for Galloway. They work with other mills in the area, such as Tembec in nearby Cranbrook, to keep their equipment busy and diversity their businesses. Galloway is working with a fair amount of burned timber this year. Although the Okanagan Park fire—which threatened Kelowna and in the end destroyed 200 houses in that city—rightly received a lot of attention last summer, southeastern BC had its own problems with the Lamb Creek fire. In a single weekend, the Lamb Creek fire grew by 20 square kilometres and threatened Cranbrook, whose residents were faced with possible evacuation.

The fires left Galloway and other local sawmills scrambling for timber last summer. Understandably, they could not predict the serious nature of the fires, nor the logging shutdowns they would cause at the time. The Lamb Creek fire was brought under control, but it has left a lot of charred wood behind for Galloway Lumber and other area sawmills. “There are adjustments that we’ve had to make throughout the mill,” Nelson explains. “We have to be very careful about the quality of chips, and getting that char out.” Chips are sold to the Celgar pulp mill, a few hours down the highway in Castlegar. “The debarker can’t get all that char, so when it goes downstream to the headrig, the operator eliminates the char, which goes to the waste pile.”

The most recent upgrade included the installation of a Nicholson SS30 high speed automated cut-off saw system. Timber from Galloway’s own quota supplies a good part of what the mill needs, but they also purchase private wood.

While Galloway has been playing a defensive game business-wise, it is also playing some offense, getting into value-added through the MSR market and pulling J-grade. “We started making J-grade and the Japanese were really hungry for it and then their economy turned bad,” explains Nelson. “So we stopped making it. But we started up again because we had some inquiries for it.” The Japanese market can be quite quirky. If the markets are good in Japan, Galloway will be able to sell their J-grade there. But sometimes, such as this year, markets have been mediocre. “The markets in Japan have not been good, and our wholesalers will sell J-grade to customers who might end up doing some remanning with it.” In general, they monitor the markets, and wherever they seen an opportunity, they will try to supply lumber and fill a need.

The MSR lumber, produced with a Metriguard system, seems to work out more consistently. “As long as it’s on grade, the customers are happy and come back for more,” says Nelson. The MSR market looks to be a good one to be involved with. According to the trade group MSR Lumber Producers Council, 2003 was a year of record MSR production, with total North American volume exceeding two billion board feet for the first time. With strong housing starts in North America, the council is forecasting continued healthy markets. Shipping into the US is really a slam-dunk for Galloway. Being so close to the border, they ship directly to two rail reloads, Burlington Northern and Union Pacific. The furthest away is about a 90-minute drive across the line.

Virtually, 100 per cent of their production goes to the US, and is marketed through long-term relationships with wholesalers. Their biggest challenge these days has been to stay efficient, says Nelson, and to keep up with industry standards in lumber recovery. That pressure is definitely there because Galloway, like all BC mills, is looking at rising stumpage costs, with the recent run-up in lumber prices. Higher lumber prices this year, thanks to strong American housing starts, have been welcomed by the industry. But more so by small and medium sized operators like Galloway Lumber. Unlike the giant Canfors and Tembecs of this world, they don’t have deep corporate pockets to fall back on when prices are low.

While Galloway Lumber has been able to continue to produce in spite of the uncertain markets of recent years, and the US countervail, Bud Nelson looks forward to some kind of resolution of the softwood countervail—and the sooner the better. And he’d definitely like to get his hands on a small part of the estimated $2.6 billion that has already been collected from the industry by the Americans, and which the industry is fighting to get back. Any returned funds would go towards a “to do” list for the mill. “We always have a list of things to be done,” says Nelson. “We’d probably do some work with the trimmers. Other than that, it’s a bunch of small ‘fix’it’ items that have had to be delayed. But it all costs money.” In the meantime, Nelson says, they’re going to hunker down and continue to play the game. “We’re just taking it one day at a time.”

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