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May 2006 - The Logging and Sawmilling Journal

 

MILL PROFILE

GATEWAY to using
beetle-kilLed wood

BC's Gateway Forest Products is using an abudance of beetle-killed wood as their base for a new sawmilling venture, with plans to eventually transition into specialty manufacturing

By Jim Sterling

Sandy Long, vice-president of Gateway Forest Products, (above) notes that building a new commodity lumber mill from the ground up could easily cost $40 million. The company was able to set up its operation for a fraction of that, thanks to savvy purchases at equipment auctions.

The devastating mountain pine beetle epidemic in the British Columbia Interior offers opportunities to the enterprising.

Gateway Forest Products Ltd is using the abundance of beetle-killed wood and simplified access to it as an impetus for launching a new sawmilling venture. In the longer term, when the supply of sound beetle wood for commodity lumber products diminishes, the company plans to make the transition into specialty manufacturing.

The unusual beetle wood situation allowed Gateway to build its sawmill on the outskirts of Prince George without the fibre security of a forest licence. Instead, wood is coming from the government’s BC Timber Sales program, woodlots and other private sources. Ground was broken for the new mill in November 2004, and the first board was cut about a year later.

Directing Gateway’s fortunes are three Prince George area families: the Schroeders, Longs and Sims. Girard Schroeder, Gateway’s president and general manager, contributes sawmill construction skills; Sandy Long, company vice-president, has a broad-based mill management and woodlands background; while the Sims family is strong on the log contracting side. “We have the key elements in terms of people to make it work,” summarizes Long.

The company name reflects its philosophy. “We were checking the Internet for available domains and liked Gateway. Prince George is the central hub to a whole range of resources,” comments Long. And Gateway symbolizes an open door to exploring entrepreneurial opportunities, he adds, and that fits with what the company is planning to accomplish. “It has always been a career goal to be an owner of a substantial sawmill operation. I’m a believer in modern technology, and that’s the direction we’re moving on with Gateway. We think there’s a better chance of success than small scale, low tech,” expands Long.

The pine beetle fibre source tends to be dry and small diameter, a profile which doesn’t fit ideally with every mill. “Our advantage is there’s a surplus of this raw material, so it makes good sense to get the wood at attractive prices and design the mill to use it,” he continues. Interesting, therefore, that most of Gateway’s sawmill equipment is used. Long credits Schroeder’s eye and ability to select good equipment at the best prices from auctions and other sources.

Among the new pieces of equipment is an 80-foot long weigh scale from Pacific Industrial Scale Co. Among the old is a 30-year veteran Wagner stacker. “It’s a 90,000 pound machine but we’re using it to unload highway logging trucks with dry wood. It’s running around 30 to 40 per cent of capacity and could last another 20 years,” points out Long. Other mobile equipment in the log yard includes a Cat 966D and a Hyundai 320 butt ‘n top.

The cut-to-length logs arrive in the yard in preferred 16- and 12-foot lengths. Typically, logs are sorted four ways by diameter in both dry and green categories, says Long. The meat and potatoes sort—about 65 per cent—is material in six- to 10-inch diameters. “We can handle up to 15-inch diameters with good recovery in this mill.”

The gravel-based log yard has the physical space to accommodate the sorts and compensates for the 20-bin lumber sort at the sawmill’s back end. The longest cut-to-length log is 16 feet, so the idea is to ribbon feed the mill and get throughput and production up, Long adds.

Plans call for production of approximately 150,000 board feet a shift, but it’s expected that will spike considerably as the sawmill settles into a rhythm and fine tuning takes place.

The original projection was for Gateway to produce about 140 million board feet of lumber annually on a twoshift basis. But Long feels the approximately 150,000 board feet a shift will be spiked considerably as the sawmill settles into rhythm and fine tuning takes place. An example of the tweaking anticipated is installation of variable frequency drives to optimize the flow of differing log sort sizes. Gateway employs about 12 to 15 people per 10-hour shift.

Other sawmill equipment includes a 21-inch dual ring Valon Kone debarker. A Kockums CanCar Chip n’ Saw infeed directs logs to an Optimil log turner and canter.

“We have what I call a quad scragg for the bigger wood, to take off the sideboards. Downstream, there’s a 10-inch Ukiah sawbox with two stacks of six saws with a .125 kerf that won’t have to work too hard here,” continues Long. He describes the mill’s USNR optimized edger as a “Cadillac,” with seven shifting saws delivering cutting flexibility. A Newnes sorter, stacker and strip placer system completes the mill’s major equipment.

Gateway has acquired planing equipment and dry kilns which will be added to the mill complex. In the interim, those functions were being supplied by Dollar Saver Lumber, a nearby remanufacturing facility with which Gateway has a good working relationship.

Long puts the financial investment in Gateway Forest Products at “several millions.” But he adds that building a new commodity lumber mill from the ground up these days could easily cost $40 million to $50 million. Gateway’s investment in order of magnitude is around 10 per cent of that.

Gateway’s partners have plans to do other things apart from commodity lumber production when the suitable beetle wood supply subsides. When that might be is the $64,000 question, observes Long. There is a 25-year history of major beetle incursions in the BC Interior since the 1980s to base assumptions on, he continues.

Beetle-killed wood lasts well in dry belt growing sites like the Chilcotin. What’s interesting is where deterioration in the wood first occurs. But wider checks in the wood, more windblown timber stands and the extra costs associated with harvesting and processing will in all likelihood make the fibre less attractive for commodity lumber production and for some other industrial uses. “We can address that wood supply to accommodate the checking and produce byproducts like chips and sawdust,” explains Long. “There’s going to be exposure to a large population of logs from which to draw specialty logs.”

Cut-to-length logs arrive at the mill in preferred 16- and 12-foot lengths. Typically, they are sorted four ways by diameter in both dry and green categories.

Long is understandably reticent about detailing what types of specific specialty manufacturing Gateway is contemplating. “It will involve the mechanized manufacturing of logs using modern milling techniques,” he says. Additionally, there are research and development and marketing challenges involved for any new product, he notes. The company also believes opportunities will arise to develop synergies with larger licensees as the timber supply profile changes.

Gateway’s analysis indicates entering the green field of value-added manufacture from a commodity lumber standpoint can be justified because the supportive infrastructure is in place. Long cites physical items like weigh scales, rail spurs and office buildings along with management advantages of solid accounting systems, marketing skills and experienced people. On the latter front, Long says Gateway has been very gratified in the labour resource it’s been able to tap. An example is people who have been laid off from other regional operations, but who have experience in many mill-related jobs and expertise in two or three. “As a result, we haven’t had to solicit any applications. It’s worked very well.”

And this core of experienced and adaptable people meshes perfectly with Gateway’s aspirations to push wide open the doors of opportunity.

 


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