Gold Island Forest ProductsFrom hobby sawmill to workhorse

The Kanigan Family in B.C. may have started Gold Island Forest Products as a hobby sawmill, but these days the mill has been ramped up considerably—with numerous upgrades—and now specializes in producing high quality custom cut cedar/fir lumber and timber products.

By Paul MacDonald

The Gold Island Forest Products sawmill in the West Kootenays region of British Columbia is a long ways from Japan, but the company’s owners are firm believers in the Japanese concept of Kaizen—implementing continuous improvements. They may not use the Kaizen term, but they know all about working hard to improve mill operations.

The family-owned business has been serving the West Kootenays and local area for 15 years, specializing in precise high quality custom cut cedar/fir lumber and timber products. Its wood is utilized in diverse applications such as commercial and residential construction, bridge timbers and post and beam construction.

While it is well established now, Gold Island Forest Products actually began as a hobby sawmill project in the early 1980s. Tom Kanigan (who is third generation forest industry) and his father, Cecil Kanigan, started the mill by rebuilding and fabricating much of the equipment that Gold Island Forest Products still currently operates.

In 2003, Tom and sons, Trevor and Jody, decided to ramp up operations, and assembled the mill on a newly purchased piece of property in South Slocan, south of Nelson, and started manufacturing lumber and custom cut timbers.

Gold Island Forest Products“We have this approach of constantly improving and investing in our sawmilling equipment and the business,” says Trevor. “When we first started, and for five or six years, 20 to 25 per cent of our revenue was reinvested into the sawmill.”

And Gold Island Forest Products continues to upgrade and streamline its operation with steady reinvestment to meet customer needs—and best utilize their wood supply.

In recent years, they’ve added additional equipment, so the operation is now a three-line mill vs. a traditional one-line mill.

“It really is a mini-version of a larger mill now,” says Trevor.

Trevor, brother Jody, and their dad, Tom, know all about working at larger mills. They all previously worked for Slocan Forest Products (now owned by Canfor) sawmills in the region.

Trevor explained that they started out with a single headrig line at Gold Island, with a circular saw with heavy kerf. Their first addition was a Baker resaw. They have since moved towards thin kerf equipment, for recovery purposes. “We want to make the best use of the wood we have to work with.”

Along the way they picked up a first generation Wood-Mizer LT300 mill. “We slowly dialed the LT300 into the overall mill, and upgraded the guide system,” says Trevor.

“The Wood-Mizer equipment has all the features that we were used to in bigger sawmills, in terms of setworks, sawing accuracy, thin kerf—the recovery is good on the equipment. And it’s reliable and dependable.”

Gold Island probably has about 25,000 hours on their LT300, and it’s still going strong. “The only costs we have had on the mill have been related to regular maintenance.”

Gold Island Forest ProductsTom Kanigan (centre) with sons Trevor (right) and Jody (left) with a truckload of cut-to length logs at the Gold Island Forest Products mill in South Slocan, B.C.

Recent changes include some modifications so the mill can take 21 foot logs, to produce 18 and 20 foot pieces, vs. the usual 16 foot.

“With the recovery, we saw a 30 per cent premium for 18 and 20 footers, and our customers were looking for that from us, because a lot of the other mills in the B.C. Interior that run cedar are pretty much 16 foot mills now,” explained Trevor.

They have also replaced the Baker unit with two new resaws, a singled head unit and multi three-head unit from Cantech.

Historically, Gold Island worked with 9 to 12 inch diameter logs.

“But when Pope & Talbot went down, the log market really changed, and we went to having to process a 4 to 5 inch bush run log sort,” explained Trevor.

Forest company Pope & Talbot had three sawmills in the region, when it went out of business in 2008. One of their sawmills was in Castlegar, near South Slocan, where Gold Island is located.

“That mill going down had a huge impact on log supply and our operation,” said Trevor. “The dynamics of the local log market changed. We knew we needed to put in place equipment to process whatever was available in terms of logs.”

Gold Island looked at its options, and saw that Wood-Mizer had twin vertical band saws running successfully—and went the Twin Vertical Saw (TVS) route, working with a local firm, Timber Line Mill Construction, of Nelson, B.C., to assist with design and construction.

“I think we’re the only 16 foot client of Wood-Mizer in Canada with the twin vertical machine,” says Trevor. That said, they don’t feel like a lonely Canuck, service-wise. “The technical support from Wood-Mizer has been really strong. We’ve been happy with that.”

They’ve also added a Wood-Mizer E430 board edger.

Gold Island Forest ProductsGold Island Forest Products continues to upgrade and streamline its operation with steady reinvestment to meet customer needs—and best utilize their wood supply. In recent years, they’ve added additional equipment, so the operation is now a three-line mill vs. a traditional one-line mill.

Being a smaller independent operation, mill service and parts is key—Gold Island wants to be up and operating as much as possible. Again, their experience with larger sawmills drives their focus on efficient operations. In a spin on the cliché about real estate being all about location, location, location, running a sawmill can be all about uptime, uptime, uptime.

“We’ve seen the experience of some smaller mill operators, where they can be fixing the equipment half the time, and only running half-time,” says Tom. “With what we have, you come in the morning, push a button and everything starts.”

Gold Island runs production on a four-day week basis, with 10-hour days. The fifth day is kind of a mini shift/catch-up/maintenance day for the operation.

While Gold Island has always been good at meeting the needs of customers, the downturn really drove home how resourceful you need to be—and resulted in them shifting gears, species-wise.

“When we started, we were probably 80 to 90 per cent fir timbers, for the timber frame home market,” says Trevor. “When the housing market collapsed, no one was spending a nickel on timbers. So we shifted heavily to cutting cedar.”

A bonus is that with the bush run cedar they work with, they are able to make pretty effective use of every log, something that was not always possible when they were cutting fir.

Although the fir market has started coming back, Gold Island is still cutting 70 to 75 per cent cedar. “Cedar has become a staple for us,” says Trevor, “and we have a really strong relationship with our broker based on cedar.”

Gold Island established a relationship with their broker, PowerWood, of Surrey, B.C., four years ago.

Gold Island Forest Products“PowerWood was the right size to match with us,” says Trevor. “They knew that when the industry recovered, they would be able to take close to 100 per cent of our production—right now, we are one of their regular suppliers. We’re quite dependent on them, and they are quite dependent on us.”

They are able to deliver upwards of 40 different types of cedar products to PowerWood—and also able to fit in smaller local cedar and fir orders. “We have to be flexible and diverse to survive, and we don’t want to lose those local orders. Jody will fit them into the daily production or on a Friday,” says Trevor.

In terms of wood supply, Gold Island has no tenure, and does not own any forestland.

“We rely buying on the open market,” says Trevor. “We’ve built a reputation for being able to go into the Revelstoke area, and compete with the major buyers in that market.” About 80 per cent of their logs come from that area, through the Revelstoke Community Forest. Revelstoke is about 200 kilometres from the mill.

They also purchase wood from small woodlot owners, as well. But the supply can be spotty, and they are looking for good logs.

“For the woodlot owners, they’re smaller and harvesting wood is not necessarily a day to day thing,” says Trevor. The quality is sometimes not there. “They might have a 36 inch diameter cedar that is twisted and gnarly, and not much use to us.”

The timber is all dictated by what’s in the stands of the woodlots, of course, and what the woodlots happen to harvesting.

Trevor said they are fortunate in that they are two large private landholders in the region who harvest steadily.

All the forest industry players in the region have been able to benefit from the “Kootenay Mix” of trees—meaning they have been little impacted by the mountain pine beetle, unlike other areas of the B.C. Interior. The Kootenay Mix includes a number of species—lodgepole pine, ponderosa pine, western white pine, whitebark pine, Engelmann spruce, western larch, Douglas-fir, western red cedar, sub-alpine fir, grand fir, western hemlock, aspen, and cottonwood. 

When it comes to logs on hand, for Gold Island it’s simple, says Trevor. “We’ll have as much inventory as we can afford. Inventory is key—without it, you are not running. So we try to bite off as much as we can, and a little more.”

Gold Island Forest ProductsOne of the truckers Gold Island Forest Products works with, Todd’s Trucking, contacted them about going CTL with its hauling equipment. And Gold Island assured them they could keep them busy. The move has been very beneficial since Gold Island does not have a cut off saw.

Gold Island has been a supporter of and beneficiary of the move to cut-to-length wood, since it has no cutoff saw. It has had to buck wood in the yard. “One of our highest costs in handling log inventory has been in the hand bucking,” says Trevor.

One of the truckers they work with, Todd’s Trucking, contacted them about going CTL with their hauling equipment. Gold Island assured him they could keep him busy, hauling CTL wood to their mill—and Todd’s Trucking ordered a new trailer, with bunks to accommodate CTL wood.

“Going to CTL wood was a big change for the area,” says Trevor. “We went from wondering if we should do it, to taking a bit of a leadership position, and just moving ahead and doing it. We pay a premium for the CTL wood—but we don’t have to spend the money bucking it in the yard now. It’s been a good thing for us, giving us big savings in the log yard.

“The move to CTL has saved us a whole big decision-making process on how we were going to deal with tree length wood at the mill. We’ll take CTL wood, any day.”

The changes are continuing with the mill operation, Trevor reports. Their dad, Tom, is about half-way through the rebuild of a Morbark debarker to add additional debarking capacity for the mill, to work alongside the rosserhead debarker they have now. They’re also looking at getting a hogging line operational for the bark, and want to tackle the waste residuals at the mill by converting it to usable hog fuel.

The combined decades of experience Tom, and sons Trevor and Jody, have with Slocan Forest Products has served them well, with Gold Island Forest Products.

“The dynamics of that experience has helped us,” says Trevor. Tom started work in mill maintenance, worked on the accounting side, and in construction for about 35 years. Jody did stacker work, planer work, forklift work and grading. Trevor worked in pretty much all aspects of the mill.

“I think we’re a good team,” says Tom. “There has not been a lot of headbutting, which is kind of surprising for a family business. Our goal is the same.”

Having that depth of experience was especially critical in dealing with the downturn. “The key then was cash flow, and just being able to put logs in front of the mill.”

The frustration they have these days is, no surprise, wood supply. It would be helpful if the provincial government, and the B.C. Ministry of Forests, stepped up and offered assistance, in the form of more wood, for smaller and mid-size sawmillers like Gold Island, says Trevor.

“We just want to cut wood—why is it so hard to get?” says Jody, in frustration.

“It would be easy for us to add a second shift, and employ more people, if there was fibre available,” he said. And they are not looking for huge amounts of fibre. “It’s not like we are running a dozen truckloads of logs per shift—we’re using about 1.5 to 2 truckloads each shift.”

They suggest that perhaps it’s time for the provincial government to review community forests, to make sure they’re delivering as much opportunity as possible, especially to smaller mill operations—and living up to their mandate of being community focused.

“We recognize and respect what the community forests stand for, but they need to respect sawmill operations like ourselves, and what we provide to the community and the local economy in terms of jobs and wages,” says Trevor.

That said, the Kanigan’s have satisfaction in seeing what has been achieved with Gold Island Forest Products. And while it can be challenging, it’s a fairly straightforward business model. “Really, we just look at the wood that is available and match it up with the markets—and stay away from what the big lumber players are doing.” And they have to be nimble and responsive to markets. “That’s why we configured the mill the way we did, with three lines to be more flexible. That way, we can handle a four inch short log right up to 32 inch wood.”

That does not mean they are sitting pat, however. There are plans to upgrade their Wood-Mizer LT40 with a Super LT70 mill.

They currently have three PLCs to control sweeps and conveyor start-ups, and the next step would be to add some frequency drives.

“We’re trying to automate things as much as possible—but it’s a bit of a jigsaw puzzle sometimes,” says Tom.

That said, the puzzle seems to be coming together nicely.

Logging and Sawmilling Journal
March/April 2017

On the Cover:
When Munden Ventures Ltd. of Kamloops, B.C. moved into logging, they made some well-thought out equipment purchases, and established solid supplier relationships with the B.C. John Deere dealer, Brandt Tractor, and Woodland Equipment, the Hyundai dealership. Munden Ventures sub-contacts out its processing (pictured on the cover) to Randy Janzen who is a Hyundai/Waratah guy (Cover photo courtesy of Randy Janzen).

Spotlight – More taxes for the forest industry?
Alberta has recently rolled out a carbon tax, and the federal government has proposed a national minimum price on carbon. How will these additional costs impact the Alberta and Canadian forest industries, considering all parts of the industry, from logging right through to the sawmill, are significant energy users?

Solid business move into logging
Munden Ventures of Kamloops, B.C. got involved in logging more by accident than by design, but it’s turned out to be a solid business decision.

Flying high in steep slopes with the Falcon
B.C.’s Hyde Creek Logging has found the Falcon Winch Assist system from New Zealand-based DC Equipment to be a great fit with the logging it does on steep slopes on northern Vancouver Island.

B.C. Saw Filer’s Preview:
The upcoming B.C. Saw Filer’s Association AGM and trade show remains a solid venue to share knowledge and resources for all those involved in the trade.

West Fraser takes over top lumber producers spot from Canfor
WOOD MARKETS’ annual survey of top Canadian lumber producers highlights the ongoing healthy market conditions coupled with mill expansions—and a change in the country’s top lumber producer, with West Fraser coming out on top, beating out Canfor.

From hobby sawmill to workhorse
The Kanigan Family in B.C. may have started Gold Island Forest Products as a hobby sawmill, but these days the mill has been ramped up considerably—with numerous upgrades—and now specializes in producing high quality custom cut cedar/fir lumber and timber products.

Canada North Resources Expo show coming up in May!
If you’re looking for equipment, machinery, products or technology in the forest and resource sector, the Canada North Resources Expo show—being held May 26-27 at the CN Centre in Prince George, B.C.—is the place to be, and Logging and Sawmilling Journal will there front and centre, as the Official Show Guide.

The Edge
Included in this edition of The Edge, Canada’s leading publication on research in the forest industry, are stories from the Canadian Wood Fibre Centre, Alberta Innovates, FPInnovations and Alberta Agriculture and Forestry.

The Last Word
Canada should focus on EU markets with the new Comprehensive Economic Trade Agreement (CETA) deal, while we wait for Trump’s take on softwood lumber, says Tony Kryzanowski.


Tech Update
Mulchers and mulching heads

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