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Oct  2003


Finding niche markets

Thanks to a series of upgrades and niche marketing, New Brunswick’s Goguen Lumber is finding its way amidst competitive lumber markets.

By George Fullerton

Goguen Lumber’s Jean Goguen with barn board/fencing material.

Eric A Goguen Lumber is the first major business visitors see as they exit Route 11 and head into the small fishing village of Cocagne on New Brunswick’s Northumberland Strait coast. With an annual production of six to seven million board feet, Goguen is one of the medium capacity mills that are vitally important for generating local employment and creating a market for a lot of small-scale contractors and private woodlot producers in the region. In addition to the mill operation, the family-run business also includes a building supply operation located adjacent to the sawmill.

Goguen Lumber was started by Eric and Florence Goguen in the 1940s and grew from a portable operation moving between woodlots to becoming a permanent mill operation at its present location. Today, the Goguen operations are headed up by five Goguen sons; Ola, Leonard, Rheal, Yvon, and Jean. Jean, the youngest of the brothers, joined the business in 1986 and currently serves as general manager. He says that having five brothers working in the same business has some challenges, but each brother has individual talents that contribute to making the overall operation a success.

The brothers hold regular meetings, twice a month generally, to review the entire business operation. “We respect each other’s area of expertise in the operation and the decisions that are made,” says Jean. “In the case of major equipment purchases or production changes, all five of us review and evaluate the situation before we make the investment.” The eldest brother, Ola, heads up trucking operations. Rheal manages the planer mill operation, and Leonard oversees the sawmill operation. Yvon handles shipping and receiving, along with managing the building supply operations. In addition to the duties of general manager, Jean also assists with log procurement and log scaling.

The mill complex has a service bay for Goguen’s truck fleet and yard equipment, which includes Cat 918, 938 and 950 wheel loaders.

Although the brothers have their individual management responsibilities, each have multi-tasking talents that allow them to step up to help out if things get busy or a bottleneck occurs. Goguen Lumber is one of the biggest single employers in Cocagne, with 35 employees during the milling season. A limited log supply means the mill shuts down from December to March. Jean explained that they opted to stop sawing in winter to avoid the extra costs incurred with sawing frozen logs. Jean admits that the winter shut down is difficult for workers, and he regrets that it sometimes results in the loss of some good workers.

Overall, though, the operation has a loyal work force, dedicated to production, versatility and safety. One of the most dedicated workers would be Armand Richard. In his eighth decade, and with 40 years employment with Goguen, he still arrives every workday at 6 am to grease the sawmill equipment in preparation for start-up at 7 am. Log supply is primarily from private woodlots (80 per cent), with the remaining timber coming through a sub-licensee Crown land allocation. About 70 per cent of the private woodlot wood comes through regional logging contractors and 30 per cent comes directly from woodlot owners and farmers that produce wood from their own woodlots.

Leonard Goguen, who oversees the sawmill operation, helps out on the edger. The mill has annual production of six to seven million board feet.

Maintaining good relations with log suppliers is critical to keeping their operation successful, says Jean. “We ensure that the log scaling is accurate, whether in the mill yard or at roadside, and we pay promptly, which is also very important for the producers. We also try to maintain as much flexibility as possible to help producers. “For example, in the summer a contractor may have some white pine on a lot that he is finishing up. Although we may not be sawing pine, we will take it so that he will not have to haul his equipment back in to get the pine during our regular purchasing season.

We try to accommodate producers as much as possible.” Providing trucking service and offering a market for off-species hemlock, tamarack and even white pine are significant added-value benefits that help maintain the local log supply. Jean said that a series of major mill upgrades since the late 1980s have improved their productivity and profitability. To a large extent, they rely on niche and custom markets rather than solely marketing commodity softwood lumber products.

They do saw a high percentage of pine, spruce and balsam fir in the operation, and supply commodity dimension lumber to the regional market. But Goguen Lumber has increasingly been focusing on producing and marketing niche products, such as timbers and rough lumber to value-added manufacturers. “We used to sell into the US fairly regularly until three years ago when the trade restrictions started,” explained Jean. “But it became just about impossible for us to compete. So we now focus on the local and regional market and special products that the big mills don’t want to bother with. We also supply all the dimensional lumber to our own building supply business.” Some of the specialty items include tamarack to flooring plants in Prince Edward Island and New Brunswick, and white pine to a value-added manufacturer in Moncton.

Goguen Lumber continues to see squared timbers as a major niche market. And then there are very specialized local niche markets like live-edge sawn tamarack lumber for ribs in fishing boat construction. Another specialty market is for diagonally sawn 4x4’s that are used in apple storage box construction. Marketing low-grade lumber is an ongoing challenge, but a little innovation and creativity keep the low end products moving. For example, low-grade white pine boards are sold to a casket manufacturer for burial rough boxes. Increasingly, low-grade two-inch lumber is being re-sawed to create an economical barn board siding and fencing product.

A large portion of Goguen’s lumber goes to customers as squared and dimensional timbers used in heavy construction. A prime example this year was a supply of decking timbers for a temporary bridge across the Petitcodiac River between Moncton and Riverview, to service construction of a new highway bridge. “A lot of four inch timbers were required for about half-a-mile of bridge,” commented Jean. Keeping the marketing options wide open requires an efficient and versatile milling operation. Softwood logs are sorted by size and species in the log yard and enter the mill by live infeed decks.

The large log line consists of a 26-inch Cambio debarker, and a Sawquip slabber with a Silvatech positioning unit. The carriage is an automatic Morbark unit with a 48-inch main saw and a 36-inch top saw. In 2000, Goguen Lumber converted the eight-foot stud line into a small log breakdown line. Small diameter logs are handled by a Cambio 18-inch debarker, and are oriented by a Valley Machine Works log turner before heading through a Forano NZ 466 chipper canter and Forano 26-inch twin saws. Small log cants are then transferred to a Valley Machine combination edger that also serves the large log line. The Valley Machine combination edger has improved productivity on the lumber end of the mill, so much so that the trim saws struggle with the volume. The brothers will be purchasing a new automatic trim table to be installed in 2003-04. Additionally, the 48-inch chipper will be upgraded to a 58-inch unit, and chip screen capacity will be increased to an eight foot by eight foot unit.

The planer mill operation consists of a Yates band resaw and a Newman 500 planer. The planer mill currently averages around 40,000 board feet per shift for smaller dimension lumber and as much as 60,000 per shift on large dimension lumber. Their kiln is currently a propane-fueled, 13,000 board foot capacity unit. Jean readily admits that kiln capacity is too small for the current production and that a bigger unit is in the plans. The mill complex also includes a service bay for the truck fleet and yard equipment which includes Caterpillar 918, 938 and 950 wheel loaders, a grapple log loader on a truck chassis and a bulldozer for yard maintenance. Owning and operating a small trucking fleet provides Goguen with certain service efficiencies. Eldest brother Ola heads up the trucking operations, and personally operates the newest unit in the fleet, a 2004 Peterbilt pulling a tri-axle trailer with centre mount loader.

Ola also holds a scaler’s licence and assists with log procurement duties. Being able to offer small producers scaling, hauling and payment for logs all in one operation is a big attraction, especially for small volume producers. Jean Goguen says the future for the family operation will lie in continued upgrades to increase efficiency, but they also want to remain flexible to be able to adapt to market changes and marketing opportunities. Jean points to the fact that two third-generation Goguen family members have now joined the business as evidence that their future is solid.

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