ADDED VALUE MAUFACTURING
Lake Country Log Homes has moved into automated solid wood home construction with new equipment from mill equipment supplier Optimil.
By Norm Poole
Although machine-profiled solid wood homes have been around for some time, automated volume manufacturing hasn’t been seen to any extent in Canada. However, a BC firm has set out to change that. Salmon Arm-based Lake Country Log Homes began test production runs this past summer with a purpose-built, fully automated manufacturing processor that can turn out a basic 1,200-square-foot log home package—complete and ready for assembly and finish detailing—in a single plant shift.
Designed and built by Optimil Machinery of Delta, BC, the processor is the first in the world designed specifically for machine-profiled log home manufacturing, says Lake Country majority owner Don Gervais. “And, at this point it is the only one.’’ The high-tech processor gives Gervais a quantum leap in production capacity to about 1,000 to 1,500 units a year, 10 times his yearly average building hand-crafted log homes, cabins and cottages. In an industry where busy manufacturers using traditional handcrafting turn out 100-plus units a year, those are production numbers guaranteed to get attention.
For Gervais, who built a fledgling business into a $17 million a year operation, the decision to automate was not an easy one. “We were one of those companies steadily producing 100 to 150 units a year, most of which went to the US and Japan (through a supply arrangement with another firm). To take the next step and be a major player in those markets, you need a production capacity of at least 1,000 units a year.
To do that we needed to move into machine-profiled homes and automated production.’’ With that, Gervais stripped the firm down and started over again with a different kind of company. After selling off a building materials division (doors, windows, and other associated components) and relocating to a new plant and yard site, the first order of business was to decide how far to go with automation. “We decided early on to go all the way in with purpose-built technology,” he says. “The problem was there wasn’t anything like this in use, in Canada anyway. “In BC plants producing solid wood pre-fab homes you see some automation but typically on a work station basis: one machine for primary breakdown, another for finger jointing, and so on,” he says. “In Europe, the processing technology is more developed, but in our view didn’t go far enough.
Optimil basically designed and built this machine for us from scratch because there wasn’t anything else like it on the market.’’ Working with what is in effect an entire automated log home production line rolled into just one machine, Gervais says the processor puts Lake Country “just about where we wanted to be’’ in terms of product offerings and production capacity at start-up. Any worry going in—specifically on whether his consuming obsession with quality would meet mass production meltdown—is now history.
Given early results with the Optimil line, he believes they have it both ways. “The processor is highly computerized. You give it the basic architectural specs for the home and it does the rest, quickly but also very accurately. The result is very impressive. At this point I feel we have only scratched the surface with what it can do.’’ For his first venture into high-tech manufacturing, Gervais would have had a hard time finding a better supplier fit.
The processor marks Optimil’s first toe into the value-added sector, a move that general manager Norm Beattie (who was project leader for Optimil) says they had been considering for some time. “We were looking for the right project but nothing made any sense in terms of playing to our strengths as a manufacturer and returning our development costs.
This one did.’’ The company is well known for its sophisticated primary breakdown lines, in use at some 100 small log sawmills worldwide. A recent project involved the installation of a 1,000-log-per-hour breakdown line—plus edger optimizer, scanner, trimmer/sorter and PLC controls—at Millar Western in Whitecourt, Alberta, making the mill one of the most modern in the country. “As primary supplier we basically did the entire mill,’’ says Beattie. Despite being a first-of unit, the Lake Country processor (designated the Optimil WPM 2000) moved from concept to a fully operational machine installed at the firm’s Malakwa plant—just east of Salmon Arm on the Trans-Canada Highway—in less than a year.
Beattie says in part this was a result of design engineers and client working on the same page virtually from the get-go. “We had already done some preliminary thinking about a machine very similar to what Lake Country wanted—a highly automated processor that combined all of the various functions involved into one unit.
The machine itself of course existed only in my head. What impressed me about Don was he bought it.’’ The result is ahead of existing European processor technology by “two or three generations, probably,’’ says Beattie, and has already prompted other inquiries. Simple to operate despite its sophistication (software development consumed one person-year alone), operators can be comfortably up to speed on the unit with about two days of training. “It doesn’t take an engineer or a PhD in computer technology to run this machine.’’
Lake Country production manager Guy Lord, a key player through the machine’s development process, says he too couldn’t be happier with early production results off the line. “It is completely controlled by computers and servo-motors, which makes the entire manufacturing process not only very fast but very accurate.’’
Once log and material specifications for the home are fed into the processor’s “Wallbuilder” program, the computer takes over. “It handles all of the cutting calculations, including automatically cutting windows and doors both vertically and horizontally. It also cuts key ways, vertical and horizontal notches, electrical holes and through-bolt holes, and finger joints the logs so they fit together perfectly.
Every cut is precise and human error is virtually eliminated. The end result is you have a solid-wood home built to very exacting standards, but at a relatively low cost because the manufacturing process is so efficient.’’ Meanwhile, in hand with the leap in production capacity, Gervais and new partner Kari Klinger have been putting in trucker’s hours on the marketing side, which in addition to Asia includes aggressively developing a network of dealer/partners in eastern Canada and the US over the next several years.
As with other exporters into the US, the Canadian dollar is a major driver. “We have opened a dealership in northwestern Ontario (at Kakabeka Falls) and recently signed an $18-million agreement with a firm in Wyoming. We are also negotiating a 200-home affordable housing project in that area. We see a very strong market potential for these homes in the US Midwest especially, in states like Minnesota, Wisconsin, Michigan, Illinois and Ohio.
As a rule, one of our packages will amount to about half of the total home cost for the buyer, with the foundation, plumbing, electrical and so on accounting for the rest. In effect, that means a US customer is purchasing 50 per cent of a new home for 65 cents on the dollar—that is a very advantageous situation for the consumer.’’ Ultimately, the goal is to have 20 to 25 dealer/partners in North America, with the dealers initially marketing Lake Country’s output, then eventually mounting their own manufacturing operations utilizing the same technology.
Prices for the homes are considerably cheaper than hand-crafted units, which can range from $160 all the way up to $250 per square foot. Offerings in Lake Country’s broad machine-profiled catalogue—400-square-foot cabins and cottages through to 1,500-square-foot family homes—typically range from $110 to $120 per square foot. Gervais stresses that this is fully equipped (floors, ceilings, windows, doors) and includes on-site assembly.
At that cost, machine-profiled solid wood homes are closing the gap rapidly on the cost of conventional 2x4 frame construction, typically between $90 to $100 per square foot in BC. “Actually the cost of a frame home would be very similar to one of our solid wood homes if they used the same quality finish materials that we do—wood floors and ceilings, for example, rather than linoleum and gyproc.’’ Much of the company’s projected output of 100 to 150 hand-crafted units a year will also be sold in the US. “These are beautiful homes and they are very popular in states like Montana, Colorado and Wyoming.
They are also at the upper end of the solid-wood home market and can be expensive. We feel a lot of customers will also like the quality we are building into our machine-profiled homes, but at a fraction of the cost.’’ Wood to fuel the new plant, a topic sure to get Gervais (and most other value-added manufacturers in BC) animated pretty quickly, will come from his existing woodlot interests and small business sales. Much of the latter has to be traded off for the large blocks the plant requires. “You don’t want to get me started on it, but it is a Mickey Mouse system as it sits now and that has to be addressed.
Only 13 per cent of the wood in this province is allocated to small business, yet that is where most of the new jobs are coming from. We also pay higher stumpage. And certainly we shouldn’t be in a position where we have to barter with the majors to get the wood we need. It is a system that simply has to be changed if we want to continue to develop secondary manufacturing in this province.’’
On the plus side, the 27 per cent countervail duty imposed by the US on softwood lumber might be a major blow to that side of the industry, but it is a boon for value-added companies like Lake Country looking to expand their markets south of the border. “If, as many people predict, one result of the countervail duty will be higher home construction costs in the US, then that makes our home packages that much more competitive.
As a value-added manufacturer, we aren’t subject to the duty. Interestingly, we have US-based log home competitors who buy their cut blocks in BC and pay duty to take the wood back across the border to their plants. Again, that is a competitive advantage for us.’’ Gervais says this isn’t a scenario he would incorporate into a long-term business plan, but “for now it gives us an edge, and a helpful one through the development phase for this new venture.”
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