Ready to grow
Labrador sawmill Goose Bay Lumber is poised to expand its operation to meet growing regional lumber needs, including developments such as mining mega-project Voisey's Bay.
By Bert Pomeroy
Clifford Jones is proud of what his company in Happy Valley-Goose Bay has managed to accomplish in the past eight years. As part-owner of the only commercial sawmilling operation in this central Labrador community of 9,000 on Canada's northeast coast, Jones admits it hasn't been easy trying to make ends meet. Since establishing Goose Bay Lumber Ltd in 1993, Jones and partner Jack Courage have struggled to keep their business alive. Now they're starting to see things turning their way. "When we started out, we were producing anywhere from 7,000 to 10,000 board feet of lumber a day and now we're up to about 30,000 feet," Jones says. "We're still a small operation, but we've seen continuous growth and we're confident and excited about the future." In the early years, as Jones puts it, the company was "run out of our ass pockets". It eventually became evident, he says, that if the company was to survive, it needed to expand its vision.
"It got to the point where we had no choice but to hire somebody to oversee the operation." Last year, the company hired industry newcomer Dwight Vokey as its general manager. "The job has been challenging and interesting in that I've basically had to learn about the sawmilling industry from scratch," Vokey says. "Based on what I've managed to learn, I'm confident there is an enormous opportunity for sawmilling in this part of the country." Goose Bay Lumber currently employs 17 seasonal and full-time employees at its mill and planer operation from May to late October-depending on the weather. "Last year, however, we didn't close down the operation until Dec. 20," Vokey notes.
"It was an exceptional year in that we had a tremendous demand for our product." The company also wanted to find out whether or not it could run its operation in temperatures well below freezing. "It worked out really well," Jones says. "As a matter of fact, the logs sawed better in cold weather than in the warmer weather." But they were harder to plane, Vokey notes. Goose Bay Lumber has made several key investments in recent years to ensure it is able to keep up with the local demand for lumber. It has installed a new eight-inch Morbark sharp chain twin saw for primary breakdown. It also purchased a second-hand Denis Comact eight-inch double-arbour combination bull edger, trim saws and a green chain, as well as a residue handling system.
Apart from an older circular carriage and the building, the mill is essentially new. The mill mainly cuts black spruce, in addition to some balsam fir, into one and two-inch construction lumber. Larger logs that can't be sawn on the twin saw are collected and eventually broken down on a 48-inch circular saw into 2x10, 2x12 and squares. The company picks up its saw logs, after they're placed alongside forest access roads by contractor Hickey Construction Ltd, and transports them to its mill utilizing a 2500 Series International boom truck. The truck can carry about 10 cords per load. The logs are piled in the yard. When required by the mill, they are placed on a deck with a Deere 544 loader, then go on to a transfer chain to the twin saw where they are sawn into four, six and eight-inch cants.
The cants, in turn, go up the line and are placed on a transfer deck and then on to the combination bull edger. The cant is then sawn into one and two-inch lumber. The live edge is put through the board edger and the slabs are transferred to a T & S Manufacturing horizontal slab saw. It then proceeds to a sorting table, to the unscrambler and then placed onto the Morbark Canadian-style two-man trimmer. From there, the lumber goes to the green chain, is sorted and packed and is ready to go to the company's rebuilt ZKT Robinson planer. The company currently sells all of the lumber it produces to the local market, supplying three building supply stores in Happy Valley-Goose Bay and one in Labrador City, some 600 kilometres away. It's estimated the local market for dimensional lumber is about 3.5 million board feet a year. While Goose Bay Lumber currently produces just over one million board feet, Vokey is confident the company will eventually be the sole supplier to the area's building supply stores.
"Our customers have indicated to us that they would buy all of their lumber from us if we could supply it," he says. While dimensional lumber is a commodity product subject to uncontrolled changes in price, Goose Bay Lumber has benefited from being established in an isolated region of the country. It's able to obtain a significant premium over lumber sold on the island of Newfoundland. Because of the high transportation costs associated with importing lumber into Labrador, the company believes it has a competitive advantage in the local market. "We have letters from all of our customers saying they'd each be prepared to buy as much as one million board feet a year," Vokey says. Goose Bay Lumber will only be able to reach its full local market potential if it can manage to accumulate enough inventory.
Financial constraints and insufficient operating capital have prevented the company from reaching its goals to date. In many cases, the mill has had to shut down because of a lack of raw material. That's ironic when one considers the fact that the mill is located in the heart of one of the richest timber stands on the planet. In an attempt to overcome some of its problems, the company is in the process of developing a new strategic plan. Last fall, it asked the Forest Engineering and Industry Services (FEIS) Division of the provincial Department of Forest Resources and Agrifoods to conduct a study of its mill. The study focussed on production capabilities, sawing efficiencies and utilization, as well as sawing accuracy of various sawing machine centres. "We had the study carried out to give us some ammunition in our attempt to secure funding to enable us to really establish the business and to give it a solid foundation," Vokey says.
"The study proved that we can saw about five million board feet of lumber from April to October each year, thus enabling us to become the sole supplier of lumber to our current customers." The study also indicated the company was the second best in the province, for its type of operation, for getting the most out of its sawlogs. "Nearly 60 per cent of the log is used, with 40 per cent going back into the yard as sawdust and slabs," Vokey says, noting that the company also hopes to soon be in the position to obtain a debarker and chipper to ensure maximum use of all of the logs it obtains. "We are currently in the process of having a study conducted on chips," he says.
"We're losing a lot of dollars by throwing that stuff away." Forestry officials have raised concerns about the waste, Vokey adds. "They're not going to allow us to go on operating if we don't obtain a debarker and chipper," he says. "At the end of the year, we'll have about $500,000 in chips, and if we can get it to market and still turn a profit, everybody will be happy." The company is confident it has reached the point where it's in a position to expand, Vokey says. "We're over all of the obstacles and, if we're able to acquire the capital to obtain the logs we need, then we'll prove we can supply the local market with all the lumber it needs. We're ready for expansion and waiting to open the door when opportunities knock. "We envision ourselves operating 10 months of the year in a new building, using our existing equipment, computerized equipment or a combination of both. We'll turn our existing mill into a storage shed."
And, like any company, it's only as good as its employees. "Our employees are highly skilled, having received various training, including workshops conducted by the Newfoundland and Labrador Lumber Producers' Association in Happy Valley-Goose Bay last year," says Jones. "I couldn't get a better bunch of workers," he says, noting that his son, Clifford Jr, also plays a key role in keeping the business going. "Clifford operates the loader and the boom truck and organizes the yard," he says. "He's an important part of our operation." Goose Bay Lumber is hoping to benefit from planned developments like Voisey's Bay, a huge nickel deposit in northern Labrador. Nickel giant Inco has rights to the deposit and is currently in negotiations with the provincial government and aboriginal groups in hopes of moving ahead with the development.
Other proposed projects are on the horizon, like a massive hydroelectric development on the Lower Churchill River, some 80 kilometres west of Happy Valley-Goose Bay. "We know those developments will eventually go ahead, doubling the population of Happy Valley-Goose Bay," Jones says. "The economy is going to boom in this area, and we're confident we'll be ready."
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