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April 2006 - The Logging and Sawmilling Journal



Maxing out Fibre recovery

Alberta’s LaCrete Sawmills is investing $13 million on an upgrade that includes a new Comact curve sawing line, part of a long-term program aimed at maximizing fibre recovery and capturing maximum value.

By Tony Kryzanowski

John Unger, the majority shareholder of Alberta’s LaCrete Sawmills Ltd, is upset that American consumers have to pay extra for their houses due to the American tariff on Canadian softwood lumber. However, he can’t afford to ignore the strong market demand for lumber in the United States; there are 120 northern Alberta jobs at his operation that are directly dependent on that demand.

Despite the recent reduction in the countervail, it’s still painful and unjust, says Unger. “It leaves a bitter taste in your mouth, especially when you are struggling to get by. It’s us paying the dues and then the American consumer has to bite the bullet in increased lumber costs.”

John Unger of LaCrete Sawmills (above) with the company’s new Nicholson A8 dual ring debarker.

Part of the solution for the Canadian forest industry is to get more efficient at producing lumber, and LaCrete Sawmills has taken that to heart. The company is investing $13 million to build a new building and production line that will improve recovery from 240 board feet per cubic metre to about 315 board feet per cubic metre. This investment is only the beginning of a long-term program aimed at maximum fibre recovery and capturing maximum value from each stick of lumber, as well as residuals like shavings, sawdust, bark, and trim blocks.

“If you’ve brought the wood into your yard and paid for it, you have to find some use for all of it,” Unger says. “If you see that you can market some product from that resource, why wouldn’t you? We’ve never closed any doors.”

The main components of the sawmill’s new line will be a Nicholson A8 dual ring debarker at the infeed omplemented by a Comact true shape optimization scanner, a Comact canter quad primary breakdown line with curve sawing capability, and a Soft-Tech optimized scanner and trimmer along with an NMI moisture detector which were purchased a few years ago.

“After visiting several sawmills with Comact equipment, what impressed us was that many of those sawmill owners said that they were able to reach about 90 per cent of their production target within 30 days of full operation,” says Unger.

Nor-Jay Construction from Vernon, BC began the construction project last fall, and the mill expects to be fully operational with its new line by May 2006.

The sawmill owners decided to build a new production line while the old line continues to operate, to maintain cash flow and to keep its payroll intact during the construction phase.

That’s in keeping with the philosophy behind how the sawmill got started in the first place in 1989. At that time, a community group from LaCrete decided to start a sawmill to create local employment, and Unger, a local business owner, was one of the original investors. Shortly after the sawmill began operating, he sold his business and agreed to manage the sawmill for six months. Fiftteen years later, he owns nearly 50 per cent of the sawmill business and continues to work as its general manager and president.

There are five other shareholders: George Friesen, the owner of the sawmill’s main logging company, Friesen Logging; its log haul contractor, Raymond Knelsen, from Knelsen Sand and Gravel; Isaac Dyck with LaCrete Tire and Battery; Jake Wiebe from Wiebe’s Transport; and David Janzen, who is currently in Bolivia, working with Mennonite missions.

Once operational, the Comact canter quad line will process all logs up to 20 inches in diameter, while LaCrete Sawmills will continue to operate its headrig to process larger logs. “The headrig will be used for special cuts, like heavier timbers used in the oil and gas industry,” Unger says.

LaCrete Sawmills has an agreement with Tolko Industries, which operates a large dimension sawmill in nearby High Level, for up to 230,000 cubic metres of softwood, consisting primarily of white spruce, from its Forest Management Area (FMA). About 80 per cent of the sawmill’s 60 million board feet of annual production are eight- and nine-foot studs. It has a further long-term agreement with Footner Forest Products for an additional 150,000 cubic metres of aspen.

For most of the 1990s, LaCrete Sawmills sold its lumber to Japan until Scandinavian competitors entered the market with a visually more appealing second- and third-growth pine product.

As a result, LaCrete Sawmills was asked to take a discount on its product. Opting not to do that, the sawmill decided to shift its focus and supply only Jgrade and wane-free lumber to Japan, while marketing commodity grade lumber in the North American market.

Plans call for the new Softac trimmer optimizer (right) to be moved to the new sawmill line at LaCrete Sawmills.

It has also made a concerted effort to build a market for aspen wood products, from lumber to building components like paneling, mouldings and window stock. Eventually, it decided to just focus on lumber and is qualified to grade stamp its aspen lumber as a northern species according to lumber grading rules. However, the sawmill has experienced challenges at both the harvesting and marketing ends of the aspen production chain.

Unger says despite a serious effort on the part of both Footner Forest Products and the OSB plant’s logging contractors, they could not supply LaCrete Sawmills with an adequate amount of quality aspen sawlogs. The process of sorting sawlog quality aspen stems in the cutblock proved too time consuming and costly.

From a production standpoint, recovery is lower on aspen logs, as a sawmill will capture about 200 board feet per cubic metre from aspen versus 240 to 300 board feet per cubic metre from softwood. Furthermore, aspen takes up to three times as long to dry.

On the sales end, Unger says that customers were only willing to purchase aspen lumber at a discount, despite the fact that it has similar properties to softwood lumber and is less resistant to warping and twisting. “Aspen has always been an inferior market to softwood except for chips,” he says. “Now it is just something that we do to fill in the gaps, but of course we can market the chips.”

The sawmill plans to have the 150,000 cubic metres of aspen that it is entitled to delivered to its yard, where it will sort out its own sawlogs from the deck and possibly partner with Daishowa-Marubeni International (DMI) to use the remaining aspen for chips. DMI operates a pulp plant in Peace River and has the ability to bring a whole tree portable chipper right into the sawmill’s yard. The logs can be sorted right at the cut-off saw once the new line and its scanning capabilities are operational. After being scanned, inferior blocks can be kicked out to the chipper while merchantable sawlogs will go through the production line.

In addition to increasing its lumber recovery from its new saw line, LaCrete Sawmills has a strong program aimed at maximum utilization of its fibre supply. It bags 2,000 to 3,000 bags of shavings per day, selling it primarily for horse bedding.

It also pelletizes its sawdust and sawdust from three other sawmills for use in both home and industrial heating, manufactures pallets from fall down material, and intends to pursue a co-generation project where it will use its hog fuel to generate energy.

Unger says the pelletizing project started small, but has mushroomed in size and production volume. He began gathering information about pelletizing processes in the early 1990s. The sawmill opened its pelletizing plant in 2003. While the original concept was for a 25- horsepower pelletizer, the plant now has three pelletizers with the smallest unit operating at 250 horsepower.

The company has discovered a strong appetite for wood pellets as a fuel source for wood stoves, particularly in Europe, and growing interest in Eastern Canada and the northeastern United States. Unger says that Europe is a strong market for its pellet product because those consumers receive “green” credits for burning a renewable resource.

The owners of LaCrete Sawmills decided to construct an entirely new building and sawmill production line—while the old line continued to operate—to maintain cash flow during the construction phase.

A strong local market has also developed as the company has sold over 100 pellet-burning stoves in the town of LaCrete itself, and a stove is also helping to supplement the heating needs of the community hall. Consumers are using the stoves either as their primary heat source or to supplement heat supplied by a conventional central forced air heating system.

LaCrete Sawmills is shipping 20,000 to 30,000 tonnes of wood pellets annually to Denmark alone and recently shipped 10 railcars of wood pellets to a Quebec customer. “If they buy one truckload from us, we always get repeat business,” Unger says. All told, the pelletizing plant and stove sales represents about eight per cent of the sawmill’s annual revenue.

“It’s not very profitable right now,” says Unger, “but as conventional energy costs increase and if the cost hangs in where it is currently at, more people will switch. For us to make a profit, we need more production.”

For smaller, independent sawmills like LaCrete Sawmills that are working hard to become more efficient, news that the softwood lumber tariff has been cut in half will have a big impact on their bottom line. However, Unger feels justice will only be served when the nearly $5 billion in softwood lumber tariffs are returned back to the Canadian companies who paid them.

The original plan was for a single 25 horsepower wood pelletizer at LaCrete Sawmills. But the pelletizing program has met with great success, and the mill now has three pelletizers, the smallest unit operating at 250 horsepower.



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