March 2005 - The Logging and Sawmilling Journal
Moving the mill ahead
BC’s Seel Forest Products, armed with a very efficient mill operation, is forging ahead despite difficulties in securing timber.
By Paul MacDonald
When it comes to keeping on top of maintenance, whether it’s in the sawmill or out in the bush with their logging equipment, Eugen Seel and his three sons have a straightforward approach. “Whatever it takes, we’ve got to be ready to run every Monday,” says Rod. Along with brothers Randy and Darcy, Rod represents the third generation of the Seel Family involved in the forest industry. That simple—but solid—approach keeps things running smoothly at Seel Forest Products, a family-owned mid-sized sawmill and logging operation in the small community of Edgewater, in southeastern British Columbia.
Heinz Seel started the family tradition in the 1940s with a small bush mill. At the time, felling and bucking were done with cross-cut saws, horses were used for skidding, and the processing was done on a small portable sawmill. A stationary mill was built at the present site in 1970, and today Seel Forest Products is an integrated forest company, with full phase logging, primary breakdown manufacturing, kiln drying, planing and value added manufacturing, with 45 employees. With a lot of equipment to look after, the family works to be pro-active in carrying out repairs, whenever possible. “But you can’t forecast everything,” says Rod. “Occasionally we’ll get a breakdown because some of the equipment we work with, especially in the bush, can be pretty high maintenance. And we can keep the sawmill up, but a bearing can fail someplace. These things happen—it’s the nature of the industry.”
When things do happen, in addition to the heavy duty mechanic they have on staff, a member of the Seel family won’t hesitate to get in there and do some monkey-wrenching. Rod is a heavy-duty mechanic himself, so he can be put into service. And his father pitches in, as well. “I have to get a little closer these days to look at something,” adds the 73-year-old Eugen, “but I can still see it.” In terms of repairs, they advocate an interesting approach: slow down and think things out. “If we’re having problems and things aren’t working out, sometimes it’s better to walk away from it for a few minutes, rather than just going in there and taking something apart,” says Rod. “You can then come back with a fresh mind, and see something you didn’t see before. Sometimes, things are a lot simpler than they are made out to be.”
With that kind of common sense and hands-on preventative maintenance program in place, downtime is kept to a minimum at Seel Forest Products. And that’s just as well. With the US countervail, and the increase in the value of the Canadian dollar, the company, like many sawmillers, is finding margins tight these days. “We’ve been right to the pin because we went through a pretty tough period like most of the mills did for a couple of years with low lumber prices,” says Eugen. “This countervail hurts us just like it hurts the bigger companies.” While they would like to make some further capital investments in the mill, their timber supply situation is so tight that such a move would not be prudent at this point. That said, however, what they do have on the mill side hums along nicely. And so it should, since much of the equipment is fairly new. A fire consumed their mill back in 1995. “We lost everything except the bucking saw and two debarkers,” says Rod.
Due to battles with their insurance company, they had to rebuild the mill in stages. That bit of a time lag, though unplanned, also allowed them to carefully think through what they wanted—and needed—in mill equipment. At the front end, the mill has a cut-off saw, followed by the two debarkers, a VK and Morbark, and a circular headrig with computerized setworks. Once in cant form, the wood is put through a computerized combination 10-inch split roll edger, thin kerf horizontal band saw and related defect trimmer. The remanufacturing facility is made up of a small log Forano, debarker capable of efficiently debarking logs of 2.5 inches. On the small log side, Seel put in a fully computerized scanner optimizer fed curve sawing HewSaw R200 system, which can utilize logs from 8.9 cm to 30.5 cm. The HewSaw is able to cut logs into either metric or imperial size, sometimes a combination of both out of the same log. But it’s not an off-the-shelf system, Rod notes.
He traveled to Finland to see first-hand what the HewSaw was capable of doing for them. “We had a few different ideas about what we wanted to do with it. I think we’ve taken it a few steps further than most people with the HewSaw. “We went for scan and set head system, enabling us to run mized diameter logs. Frequency drives were installed to even out the highs and lows of the equipment, to keep it running extremely smooth. “We’re not force feeding the machine, which can be typical in many sawmills. It pays off in the long run because you have a lot less maintenance and the quality of chips is always high.” All this extra thought and work has delivered dividends in terms of uptime and productivity. “I think the HewSaw has done very well for us,” says Rod.
Most of the design and construction work for the new mill was done in-house by Eugen and his sons. “We’re sawmillers and we’ve been sawmilling all our lives so we have a pretty fair idea of how a sawmill should operate,” explains Eugen. “Sometimes if you get someone outside to design a mill, you can spend two years remodeling it to get it to work. We have enough expertise to know what we want, how it is going to work and what the end result is going to be when we build something.” The area of southeastern BC where Seel Forest Products operates is hardly remote—Calgary is only a three-hour drive away.
But it can still be difficult to get steady employees, says Rod, though he also adds that they have a solid core group of long-term and dependable workers. So automation of any kind is viewed positively. “Besides,” adds Eugen, “you have to automate to compete. If you stay small and focus on manual labour, you’re off the playing field completely. We have to compete in the same lumber markets as a major company like Canfor does. If they’re selling lumber for $350 a thousand, the brokers aren’t going to pay you more because you’re a little guy. That’s pretty clear.”
To distinguish themselves in the marketplace, Seel Forest Products tries to stay away from playing the commodity lumber game, producing higher quality wood products. That product can at times command a premium if the market is tight. And even if there is lots of lumber in the market, the high quality product cuts them away from the pack, making them a preferred supplier. A lot of their lumber comes out of the planer as four square product, which has created a loyal customer base.
They have not pulled any product out for MSR or wane free, meaning it is high quality wood and there is lots of potential for value added. About 50 per cent of their production is in 5/4 material in four-, six- and eight-inch widths used for fascia and radius edge decking. They also have longer drying times, says Rod, of 50 hours for commodity lumber, 110 hours for joinery and lamstock, allowing them to better control the stresses on the lumber, resulting in a much straighter finished product. “We’re typically a higher end producer. We’ve produced a lot of joinery grade pine, planks for the solid wood furniture market, and a lot of fir lamstock that has gone overseas.” Seel Forest Products is truly a family operation, with Eugen’s wife, Wanda handling lumber sales.
This diminutive woman, who plays violin in a local quartet as a hobby, should not be underestimated. “She is highly respected by everybody that we sell to and she is tough as nails,” says Rod. “She doesn’t take bologna from them, and they know that and respect that. Some of them will phone up and say ‘let me talk to Mom’.” Logging operations are run by Randy and include full mechanical and high lead operations, as well as some contractor blocks. Almost all logs are hauled by company trucks which are operated under a BC government registered PM program. All roadbuilding and rehab is carried out by company crews. Included in the equipment line-up is a Washington 88 tower, a Timbco 445 with Quadco 24-inch head, a Link-Belt 3400 with Denharco dangle head for processing, two Cat 518 line skidders, a single Cat 518 grapple skidder. Rounding out the equipment is a Hitachi 270, Komatsu D85, a Cat D6, and a Champion 760 grader.
A fleet of seven Kenworths haul logs, chips and mill waste. The big snag for Seel Forest Products these days is out in the woods, with a lack of affordable timber. They do not have any quota, so they have to purchase timber off Crown land, and from the little private wood that exists in the area. “It’s real battle out there right now,” says Eugen. The approach the provincial government is currently taking favours large companies, such as Canfor and Tembec, at the expense of small and medium-sized operations such as Seel, he says. “Big companies are big companies and there is a place for them. They bring in a lot of revenue for the government because they process a lot of wood. But I don’t like the trend—the companies are getting too big. When you see the whole industry in an area controlled by one or two companies, it makes it very difficult.”
Under the previous provincial government in BC, which was NDP, consideration was given to value-added industries and job creation. Seel has had access to timber under a value-added program and was able to be a consistent supplier, for example, of joinery product in the export market, to the UK, Portugal and Spain. And they were a steady supplier of lamstock to Japan. They can no longer serve those markets with the consistency they demand because there isn’t consistency in the timber they are getting. “These buyers want a long-term relationship. But under the new timber sale program in BC, we don’t know what we are getting from one timber sale to the next.”
Sales are now being done under a government agency, BC Timber, and Rod notes that it has been slow to get off the ground. And, he adds, these sales are also open to the large companies, who already have quota. Seel is at a disadvantage because the large companies pay lower stumpage on their quota wood. With this, they are able to average out their timber costs when they bid on higher cost wood through the BC Timber sales. “We can’t do that because we don’t have quota. We have to acquire 100 per cent of our timber through the sales,” notes Rod. In their discussions with government about their situation, they are told that they need to run more efficiently and to trim their costs. “They say to us, ‘you have to cut costs.” Well, they are creating our biggest costs with the high cost of timber. We can’t cut our costs for fuel, tires or wages,” says Eugen.
While they have an efficient mill operation now, Eugen says they could benefit from investing about $1.5 million to get their costs more in line. The money would be go to things like a lumber stacking system. “But you don’t make that kind of investment unless you have the fibre. We need to have that fibre to have a level playing field. We can stand on a level playing field, but I don’t think we have one anymore. “We’re not complainers. We went into this business with our eyes wide open. But we can see that the changes that have been made in the last few years benefit the major companies, and not smaller companies like us.” In terms of volume, he notes they are looking to get a reasonably modest amount of timber: about 80,000 cubic metres a year. “We’re not looking for some magic large number so we can boost and grow our production to two or three shifts. We don’t need that. We focus on quality and can run on a one-shift basis and make a go of that.”
One initiative they are taking involves talking with some of the local First Nations groups, who are receiving timber under a new provincial government program. Timber might be available for the mill through some kind of joint venture that would see band members working in the bush. “I think there are going to be some real opportunities to deal with the First Nations,” says Eugen.
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