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Nov 2004 - The Logging and Sawmilling Journal

SAWMILLING

Diversifying the business

Ontario’s Miller Lumber has a core business of producing utility poles, but outside of that the company has diversified its product line, and sells directly to the public.

By Paul MacDonald

 

It may seem a bit unusual, but up until a few years ago you could come across products from Ontario sawmiller Miller Lumber if you ate at any Harvey’s or Swiss Chalet restaurant. Miller Lumber did not have anything to do with the burgers or chicken served at these giants of the fast food business—but they supplied charcoal to the entire chain of restaurants. Initially, the charcoal was produced from waste wood at the mill, but the business grew so big that that in addition to using wood waste, they were also buying low-grade wood specifically to use for charcoal.

From its operation in Ontario, Miller Lumber has shipped peeled red pine utility poles all over the world, through Stella-Jones, which specializes in manufacturing and marketing utility poles.

While that business relationship came to an end when these restaurants switched to natural gas, those particular customers go to prove the initiative Miller Lumber takes to serve a diverse group of markets, some of them having nothing to do with lumber or traditional wood products. They still continue to produce charcoal, for example. “We’ve had to diversify,” says company president Murray Miller. “Since we’re not big, we’ve tried to do a bit of everything.” Miller Lumber has been around in Barrie, Ontario—two hours north of Toronto—for 50-plus years. The company was founded with a bush mill by Murray’s father, Maurice. The current site, pretty much on the doorstep of the fast-growing community, has been home to its stationary mill since the 1950s. S

ince that time, this mid-sized mill operation has rolled with the changes in the industry, especially shifts in the market, turning out a variety of wood and wood-related products. These days, the core of the business comes from producing utility poles. “That’s really our big product now,” Miller explains. From their modest operation, they have shipped peeled red pine utility poles all over the world, through Stella-Jones Inc, a company which specializes in the manufacturing and marketing of utility poles. About 50 per cent of Miller Lumber’s business is currently in utility poles.

Using mostly red and white pine timber primarily purchased from the county, Miller Lumber cuts between 6,000 and 8,000 board feet a day, but little of that is in dimensional lumber. “We’ll do specialty work, if someone wanted something like cathedral ceilings or a mantle. That kind of work,” says company president Murray Miller.

That said, Miller sees the need to continue to diversify and is avidly watching markets to see what product niche to serve next. The healthy housing market in Ontario, and North America-wide, has done great things for the big dimensional lumber producers like Abitibi-Consolidated or Canfor, but done little for smaller producers like Miller Lumber. They cut between 6,000 and 8,000 board feet a day, and very little of that is in dimensional lumber. “The increase in housing helps the industry overall, but we don’t get much into supplying lumber for homebuilding. We’ll do specialty orders if someone wanted something like cathedral ceilings or a mantle, that kind of work. We can turn that out pretty quickly,” says Miller.

But just as the large companies tie in other forest products-related operations, such as pulp and newsprint, to integrate their operations and make use of all of their fibre, Miller Lumber has been doing the same, in its own way. “The poles have been the mainstay of our business for the last 10 years. But the sawmill has been good to handle the culls and other material. ”

 Miller Lumber’s John Deere 544G loader (above) handling fence posts in the yard. Leftover fibre from making utility poles is often used to make fence posts in a variety of sizes.

The mill equipment includes a vintage A H Oliver circular saw for the main breakdown, matched up with a Forano edger. There are two Morbark debarkers. And as of earlier this year, the mill was looking to replace its two-sided planer with something more current. Its mobile equipment includes a John Deere 544G wheel loader and self-loading log trucks. Of late, they have been taking the leftover fibre from the poles and, when possible, making fence posts in a variety of sizes. Culls—logs that can’t be used for utility poles—are cut into squares, and sent off to other mills in the region for re-manufacturing.

On the specialty side, they produce materials for log cabins, board and batten, rough sawn lumber, scaffolding planks, siding materials, and firewood, all primarily from the red and white pine in the region. Slabs from the logs are sold to the public. What is not sold is ground up and sold to local wood-related manufacturing facilities, such as Panolam, which turns out melamine and laminate products just up the highway, in Huntsville. Miller Lumber does a healthy business in wood mulch, especially with the city of Barrie, which does a lot of planting during the summer months. “We get a good amount of pick-up truck traffic through the mill, with mulch, shavings and chips.” The company, unlike most sawmills, does a good amount of this drive-in retail business.

It involves small quantity sales, but they do a good volume of these. Most of the timber Miller works with comes from the county, and it is secured in open bidding with other area sawmills. “It’s very competitive, he says. “Some you win, some you don’t.” When he wins a bid, Miller has to take all of the trees in the bid, whether they’re five-inch trees or 16-inch trees. “Simcoe County has some of the oldest stands in Ontario, but they are still going through that 100-year cycle,” he explains. “The county is at about the 70 or 80 years stage now, so there is still some cleaning up to be done.” In an average sale, 20 per cent of the mostly red pine might be over 12-inch, with the rest under that. “But we have to work with it all,” he notes.

With the wood he does turn out, aside from the poles, Miller tries to focus on high value hardwood and grade wood, wherever possible. Much of the hardwood goes to furniture manufacturers around the Toronto area, but they also do a small amount of business to the US. Since Miller Lumber does not have drying facilities, customers make their own arrangements for drying, and the wood is shipped directly to those facilities. A good amount of their timber comes from private land, as well. “But a lot of the private wood hasn’t been thinned properly, so there are a lot of first thinnings,” explains Miller. “We don’t get into that because we can’t afford to get into the small stuff, we don’t have orders for that size wood.” Miller Lumber, having been around for more than 50 years, has earned a good name in the business, with many referrals from private landowners.

But there are still some skittish private landowners in the area. Some would prefer their land be harvested by horses, which is still possible—there are still a few horse logging operations around. But Miller relies on horsepower, rather than horse power, with his logging. He has several contractors who harvest for him, including son, Larry. Outside of the utility poles, the mill deals mostly in regional markets, which Murray is thankful for. He used to supply a US customer with a bit of lumber, but he let the company’s softwood quota slip. “The way it was, there were sometimes problems with us exceeding quota at certain times of year. We would have quota available in the next quarter. But the customer doesn’t want lumber in the next quarter—they want it now.”

These days, he finds it just as easy to ship to the US through a mill that hasn’t filled their quota. One significant move the company made recently involved stepping up itssafety program. While they had a solid program in place, it’s now more detailed, and supported by a paper trail to keep Ontario’s Workplace Safety and Insurance Board satisfied. They also joined the Ontario Forestry Safe Workplace Association (OFSWA). With OFSWA, the companies operating in the region get together on a regular basis and compare notes, safety-wise. “That’s been really useful for everyone,” says Miller.

In terms of the future of the mill, Miller says it will depend to a certain extent on the growth going on around them. The city of Barrie has been expanding in leaps and bounds in recent years—it is now a satellite city to Toronto—and there is some chance the city may annex the area around and including the mill. A townhouse development and shopping mall is already basically just down the street. “The boundaries are pretty close now, but they’ve been pretty close for 15 years,” he says. If annexation happens, he would sell out and move the operation to a more rural location—and just continue the hunt for markets and products from there. “Things have worked out so far with the business and we’d like to continue,” he says. “It’s kept us going and 20 people working. But it’s only because we’ve all worked together.”

Single trees worth a small fortune: an urban myth

Like a lot of mills operating near urban areas, Miller Lumber gets its fair share of calls from people who think the hardwood tree sitting in their backyard is worth a small fortune. “I can’t recall how many times I’ve been told by someone that their one tree is worth a lot of money,” president Murray Millar says. “Someone probably told them their tree was worth a lot of money—but they didn’t tell them they needed half a dozen of those trees to make it worthwhile. We can’t afford to be going up and down the roads picking two logs up here and there.” They need at least a couple of loads of logs to make it worthwhile, and that’s if they can get in and out of there quickly. But more often than not, they give so-called “urban wood” a pass. “Around homes you have to worry because you don’t know how many nails and spikes someone has driven into the trees over the years. You’re better to take your chances out in the bush.”

 

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