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May 2003


Fishing for lumber markets in Iceland

Newfoundland’s Jamestown Lumber, supported by mill equipment investments, is looking to develop new markets, notably in nearby Iceland.

By Heather Ednie

Robert Dingwall (left) and Chris Dingwall of Jamestown Lumber: Determined to seek new markets and value-added products.

On the east coast of Newfoundland, overlooking the beautiful shores of the Bonavista Peninsula, the Jamestown Lumber Company is generating high-grade lumber for customers throughout Eastern Canada and the United States. A determination to seek new markets and value-added products, combined with technological innovation, has nurtured Jamestown’s success. The Jamestown Lumber Company was incorporated in 1974 when a group of independent operators of small sawmills on the Peninsula decided that they could achieve greater success through joining forces.

Production that first year was only 278,000 board feet, but that has risen over the years to an average 14 million board feet annually, with sales in excess of $7 million. Work on maximizing fibre recovery and marketing byproducts has resulted in some solid progress. Since 1993, the company has spent over $10 million in capital investments and seen employment rise from the original nine in the 1970s to about 60 people today. “Two-by-fours are still our bread and butter,” says Robert Dingwall, president and CEO of Jamestown Lumber. “After sorting by grade, we sell to different markets, mainly in the United States for construction-quality wood, and in Ontario and Quebec for studs and packaging quality lumber.” The Newfoundland market is seasonal, so offshore markets are targeted. First, Dingwall looked in Canada—in Ontario, Quebec and the Maritimes.

Then, in the late 1990s, the United States became their biggest shipping destination. The bulk of the lumber produced at Jamestown arrives in the United States—in the Great Lakes region and south to Florida. “In the beginning, most of our product went to eastern Newfoundland, around St John’s,” Dingwall says. “At that time, pulp wood was a very small part of the business. However, in the early 1990s, we put in debarking, chipping and screening equipment and integrated our activities. We’re now able to produce pulp fibre, and so our relationship with pulp and paper mills was founded.” Jamestown produces some green lumber for the treated wood market, such as patio stock, which is sold mainly in Newfoundland and the Canadian Maritimes.

Jamestown is a random length mill and is able to produce up to 16-foot pieces. However, eight-foot 2x4s account for almost 60 per cent of production.

The majority of the mill throughput, however, goes through the kiln and is sold dry. Though most of the lumber produced is sold in the States, a larger portion is currently being sold in Canada due to US duties. “This past year we reduced production by a couple of million board feet—about 20 per cent—due to the duties,” Dingwall says. “So, we’ve been investigating other markets. Iceland, for example, is probably appropriate for consideration. We’re the most eastern island in North America, while they’re the most western island in Europe. There’s an opportunity for growth there, I think.” Jamestown has been in discussion with representatives from Iceland. Icelandic companies have shown interest in the high-grade bevel siding, or clapboards, that Jamestown produces.

In Iceland, construction is mainly masonry, but the potential for wood structures is growing, Dingwall says. “Our hope is to enter a value-added initiative,” he explains. “For example, to produce both the siding and the corner boards and window trim.” The random length sawmill is able to produce up to 16 feet. However, eight-foot 2x4s accounted for almost 60 per cent of the production in the past four years. “Currently, we’re evaluating changing the process—we’ve been a number of years in the eight-foot game,” says Dingwall. “In Europe, mills are more attuned to market demands than we are here in Eastern Canada. We have an eight- to 10-week supply of eight-foot logs in storage, but we can’t quickly respond to enquiries for longer stock.”

Numerous modifications have optimized the equipment throughout the mills. For example, an Alco planer, from Alberta, was greatly modified by Mark Fry of Jamestown Lumber. He added a variable hydraulic feed and replaced four-knife square heads with eight-knife round heads. The old drivers were replaced so the heads are now individually motorized and extra feed rollers and guides were added. “Alco wouldn’t recognize the machine today,” says Fry, a partner in the company. “We’re out in the woods here—literally and figuratively. We had more sophisticated machines, but they required many repairs using specialized parts. Now, we’re realizing about 99.5 per cent utilization from the chain, sprocket and banded belt feed drives, and we're satisfied.”

Jamestown’s logging operations account for about 50 per cent of the sawmill’s annual throughput. The rest comes from small Crown contractors and pulp and paper company lands. In the logging operation, black spruce accounts for about 90 per cent. The rest is divided between balsam fir (five per cent) and hardwood and eastern larch. Over the past five years, all the logs have been cut to 2.5 metre bolts (eight feet). They will produce about 60 per cent 2x4s, six per cent 2x6s, and the remaining 34 per cent is divided between sideboards and shorts. “Our trees are so consistent that you can predict the weekly breakdown,” says Dingwall.

In the woods, Jamestown used to have track-type harvesters with fixed heads. However, while on a trip to Finland and Sweden in the spring of 2001, they bought a Timberjack 1070 wheeled harvester. “Delivered in October that year, ours was the first of this model in service in North America,” Dingwall says. The new machine, with a 745 Waratah head on it, logged about 4,500 hours in just over a year. It is essentially a smaller carrier with low operating costs, such as low fuel and oil consumption, and is more productive than the machines previously used. Jamestown’s woods operation runs 24 hours a day, five days a week, doing both forestry and road building.

In 2000, they bought the primary extraction machine, a Fabtek 546C forwarder, which takes about 14 cubic metres of softwood. Two Timberjacks—a 610 and a 230 —have been in operation since 1997 and 1996 respectively. Handheld GPS systems are used to fix location, especially at night. While in Scandinavia, Dingwall noted the mills were linked directly into the operation of the harvesters. “It’s something we want to work towards—like a real-time dispatch system,” he says. Dingwall sees opportunities for improvement in training and certification of operators, which would have great consequences for the operations. Currently, he’s in discussion with the College of the North Atlantic to create hydraulics training short courses, with certificates.

At provincial meetings of industry leaders last summer, the need for increasing skills in both operating and servicing hydraulic systems was highlighted. It’s one of many areas where he thinks training should be improved. Dingwall also wants to see all forestry workers understand the full range of concerns involved in an operation. He says he has spoken with many of his employees and other operators throughout the industry and has received a positive response for such training. “We’ve observed in northern Europe that training in forestry is required before you’re allowed to operate a machine in the woods,” he says. “We don’t do that here.

There are many benefits, including improved safety, productivity and a greater understanding of the effects of individual actions on stand health and regeneration. “It’s time for cultural change—time to improve education and training for people working in the sector,” he continued. “Then, as an industry we can be recognized as accountable for our practices, rather than be policed by the government.” Today’s biggest challenge is the trade restrictions with the US. Dingwall says it’s frustrating, as the customers still want the wood. “Our customers range throughout the eastern states, from Amish barn builders in Pennsylvania to Lowe’s in Ohio. We offer strong, high quality wood and it’s attractive to storm-swept areas.”

However, though the market is tough today, Dingwall is confident the sawmill will make it through, supported by efforts to maximize the opportunities for new markets. “Lumber has its highs and lows—it always has,” he says. “And we, as producers, just have to ride the wave and stay on the board.”

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