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March 2006 - The Logging and Sawmilling Journal




Broadening the base

Ontario’s already diversified Cherry Forest Products is broadening out even further, moving into the production and marketing of hardwood veneers.

By Paul MacDonald

Cherry Forest Products seems to have just about the best location going for a hardwood mill operation in Ontario, both in terms of its market and the timber it needs.

The company’s mill in Guelph, Ontario, sits on the edge of a region with some of the best agricultural land—and hardwood stands—in Ontario. And down one direction of the nearby Highway 401 lies Canada’s largest city, and market, Toronto. In the other direction is access to some of the largest markets in the industrial heartland of the US.

Despite the Cherry Forest Products name, the company is active in all domestic hardwoods. Hard maple makes up about 40 per cent of production, followed by white ash at 10 per cent, and a mix of soft maple, red oak, white oak, basswood, hickory and walnut.

That proximity has certainly paid off in the last several years, notably with the company’s most recent venture: the production and marketing of hardwood veneers. The sister company, Cherry Forest Veneers, is a partnership with veneer veteran, Joachim Abele. Abele brings experience and market knowledge to the partnership while Cherry Forest Products brings access to the timber and experience on the logistics and marketing side.

Although Cherry Forest veneer is not produced on site, the custom slicing of the company’s logs at a number of US veneer mills produces consistently high quality veneers. A Cherry Forest employee always supervises the production to insure a properly produced veneer parcel.

Cherry Forest Products’ access to the raw material and the experience of Abele and veneer salesman Max Yott have made for a smooth transition into the marketing of sliced veneers, says Jacob Baranski, export sales manager for the company.

With the right logs, and experienced people, they can produce high quality veneer parcels. “And in veneer, quality is everything,” says Baranski.

Cherry Forest Veneers is just the latest venture for Cherry Forest Products, which is run by Robert, John and Jacob Baranski. They took over from company founder—and their father—Edward Baranski.

Cherry Forest Products is actually the lumber and dimensional arm of Barco Materials Handling, which is the founding sawmill and remains a significant producer of pallets and wooden packaging materials for southern Ontario. This side of the business has recently seen some new equipment. “The acquisition of a Viking 525 Turbo nailer has resulted in a large increase in capacity and a more consistent quality pallet,” says Bob
Baranski, who oversees the pallet and packaging side of the business.

Despite the Cherry Forest Products name, the company is active in all domestic hardwoods. “We still produce a large amount of cherry in cut-to-size and lumber for the domestic and overseas markets, but it represents only about 20 per cent of our business,” explains Jacob.

By far the biggest species they are handling is hard maple, at about 40 per cent, followed by white ash at about 10 per cent, and a mix of soft maple, red oak, white oak, basswood, hickory and walnut making up the balance.

Cherry Forest Products has an interesting business approach in that, while it has a mid-sized sawmill facility of its own, a significant amount of product is turned out at about half-a-dozen smaller sawmills in the region, some of which will specialize in a particular species. They have two mills, for example, that will cut all their ash, and others that cut only soft maple.

The combined daily production is about 40,000 board feet, with about 15,000 board feet of that being done at the Guelph sawmill, and the rest at the outside mills. The mills quote the work on a per thousand board foot basis.

“The use of outside sawmills has allowed us to focus on marketing each portion of the processed log to its best use,” says Jacob.

Having the option of milling offsite has also meant that Cherry Forest Products has been able to avoid the major capital expense that would have been required to ramp up its own sawmill to turn out that level of production. Instead, they have directed investment into other areas, such as kiln capacity, that offer a more immediate payback.

The main breakdown unit at the Cherry Forest Products mill is a vintage Morbark circular saw headrig set-up. On the dimension side, they have 16 manual chop saws, two Mereen Johnson 424 multi-rips, and a Weinig Raimann multirip. A Cantech planer and Weinig sixhead moulder are put into service for some customers who are looking for a more finished product.

Cherry Forest Products has been in the dimensional cut-to-size hardwood lumber business for about 15 years, and the move into this area back then was part of an effort to diversify operations and markets. They focus on clients who are looking for exacting colour and size specifications. The company produces cabinet and furniture components, along with just about every other cut-to-size dimension product.

With 150 employees, and running two shifts, the operation is pretty much at capacity. “We were running three shifts on our mill at one time, but there was no time for maintenance. So we moved some of the production to the smaller mills.

Jacob Baranski, export sales manager for Cherry Forest Products: “The use of outside mills has allowed us to focus on marketing each portion of the processed logs to its best use.”

A key part of the quality control at Cherry Forest Products lies with the company’s graders, who are considered an integral part of the business from a quality point of view.

“At some point, we may have to look at rebuilding our mill to save kerf,” says Jacob. “But the use of the custom sawyers has been a very positive way to increase volume while still maintaining control of the resource.”

The cut-to-size dimensional and sorted- to-width lumber portion of the business brought a boost in production that, in turn, created the need for further kiln capacity.

The big investment for the company has come in the kilns. They have a total of nine kilns, ranging from 45,000 to 80,000 feet capacities. They are a mix of Maweg Hildebrandts from Germany, Cathild from Quebec, and the more recent kilns are Nardis, from Italy. All of the kilns are equipped with Lignomat computer kiln controls.

“Pretty much all of the recent investments we’ve made have been on kilns and storage,” explains Jacob. “We could always see getting a return on the kilndried
lumber, so that’s where we’ve focused our capital spending.”

Aside from North America, their main market for cut-to-size product is Europe. “It’s been a very loyal market for us. Each year we’re booked to capacity,” says Jacob. “You have to be really on the ball with your delivery times, and most importantly quality, for the European markets. But if you do that consistently, and offer a fair price, the customers return every year.”

He adds, though, that North American hardwoods are not in as high demand in European markets in recent years, mainly due to the higher prices. “The North American demand is booming for products like hard maple, and prices have increased.” Less costly European white oak and beech is having an impact on the market, along with the wood that is brought to market from Russia, South America and Africa.

While Cherry Forest Products has had some very successful years, Jacob notes that they have been very careful about expanding. “We haven’t expanded for the sake of expansion because it’s too easy to saturate the market and ending up having to take prices lower than you should just to justify the production you are turning out.”

On the production side, there is an extremely strong focus on quality. They have their own well-established program— with quality control manuals at each workstation— rather than relying on an outside system. “We’ve looked at other quality control systems and they really wouldn’t work here. ISO works from a mechanical point of view and is more suited to a production line process. It doesn’t really apply to us—we are producing hardwood lumber where we are looking at not only colour, but shade of colour, and intricacies such as gum in cherry or mineral in hard maple.”

Each shift checks the other’s production, with a quality control check done each day on 10 pallets of randomlyselected dimensional product.

On the kiln-dried lumber side, a key part of the quality control lies with their graders. “Our lumber graders are a real integral part of the business from a quality point of view. They really have the customer’s best interest in mind,” says company president John Baranski.

All of the logs for the main mill at Cherry Forest Products and the contract sawmills come from the immediate area, which can give them a marketing edge. “We can offer our customers consistent quality, with logs that are all from one area, from one company, from one kilndrying facility,” says Jacob.

The logs are from about a 100-kilometre radius. “Basically, we’re dealing with private landowners and farmers who own 150 or 200 acres of land, with 50 acres of forest, if that,” explains Jacob.

Baranski adds that there are strict county regulations that dictate what size trees can be taken out, where they can be taken from and what timber has to stay through the use of basal process and bylaw officer reviews before and after a cut. Absolutely no clearcutting is allowed in the county bylaws of any of the different counties they get their wood from.

While Cherry Forest Products has had success in domestic and European markets for its lumber, dimensional and veneer products, it is always looking at growing markets. “We’re keeping an eye on things in Asia. We know who the hardwood users are and we quote on a regular basis. It’s really a matter of getting them to pay the price for the quality.”

Staying on that high road of producing quality seems to have paid off for the company, especially considering they have been able to triple sales over the last decade. “The Chinese market in particular is being bombarded by so many hardwood producers from North America that the competition is very intense,” says Jacob. He notes that Asian sales are usually made on price, before quality. This is the reverse of European customers, who are strongly focused on quality. “The European customers look at it more from the point of view of what yield they are getting out of what they are buying, and they expect to get what they pay for. Their labour costs don’t allow for remanufacturing or mistakes in grade.”

They’ll monitor markets and look for the right opportunities for the company, says Jacob. “We’ll continue to watch new markets and look for the customers that fit our niche of quality and customer specific sorts.”

Cherry Forest Products’ philosophy of processing hardwood timber into secondary processing has created one business with many different products. From sliced veneer, to sorted-to-width grade lumber, dimension products and pallets, each portion of the log is utilized to its fullest extent. By taking the log to its most logical use, Cherry Forest hopes to continue the family business and service its customers for decades to come.



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