By Tony Kryzanowski
Copyright 1996. Contact publisher for permission to use.

  Workers at EB Eddy Forest Products' AGAWA sawmill in Sault Ste. Marie recently wondered if new government restrictions on quality white pine sawlogs meant their future was in doubt. But the saving grace was that EB Eddy has enough forestry experience to roll with the punches, and will spend $13 million to upgrade and restructure the sawmill.

The result is a new focus on value-added hardwood production, possible construction of a flooring mill, and modernization of their veneer mill.

The Ontario government has restricted white pine sawlog harvesting in the Algoma region stretching from North Bay to Sault Ste. Marie. And in a further cost-cutting measure, they have handed off forest management, traditionally handled by their Ministry of Natural Resources, to the companies themselves.

EB Eddy was severely affected by this sawlog restriction, reducing their previous level of five million board feet of pine sawlogs annually, to one-fifth that amount.

EB Eddy manager of Forest Resources and General Manager of Pineland Timber, Martin Litchfield, says they would have liked more than two years to make the adjustment. But once it was obvious the government's decision was final, "we refused to be crybabies about it." "EB Eddy supports the government's initiative because it will mean sawlogs in 20 to 30 years," he says. "This wood was available to us in the past, it was sustainable in the past, everything was moving fine."

But the current clash between forestry and public use of the forest resource means companies like EB Eddy have to evolve. "We can't return to the old days," says Litchfield. "People do want endangered spaces, people do want more parks. There are other environmental considerations that have to be built into the plants."

EB Eddy laid off one-third of its AGAWA sawmill staff once the government made its announcement in late 1995, and suspended logging to supply the mill for a month and a half. But there is a brighter future now that EB Eddy has adopted its five year plan to bring the aging AGAWA sawmill into the new millennium.

Most of EB Eddy's forestry operations occur in Ontario, and they are headquartered in Espanola. They operate three Ontario sawmills -- in Timmins, Elk Lake, and Sault Ste. Marie. They have been active in Ontario forestry since the 1860's, and are also a major pulp producer. The government's decision presented them with two challenges relating to their newly-acquired AGAWA sawmill in Sault Ste. Marie.

The short term problem was finding enough white pine sawlogs from a much larger area to keep the AGAWA sawmill operating. EB Eddy hired more buyers who aggressively pursued more sawlog resources in the Ottawa Valley and the United States. Secondly, they took a much more aggressive approach to trading wood with other companies. Finally, they launched a cooperative private land program, whereby they would make it worthwhile for loggers and private land owners to harvest smaller amounts of good quality white pine on their property.

They developed central delivery locations, the largest being Nairn Centre just east of Espanola, and organized two way transportation where sawlogs went to Sault Ste. Marie, and pulpwood returned to Espanola.

EB Eddy made it worthwhile for loggers to include sawlogs on top of their pulpwood loads. "We told them that we'll set up a convenient drop off point," says Litchfield, "we'll scale the wood, we'll pay you promptly, we'll sort the wood, we'll create loads so that we combine six logs from the independent logger and the seven logs from the First Nation down the road, put them together and send them to Sault Ste. Marie."

That solved the immediate problem. But what about the sawmill's long-term future. EB Eddy is committed to the AGAWA sawmill over the long haul, according to Litchfield. That's more commitment than mill employees have heard in a couple decades.

A tour of the mill is like stepping through a time machine. The mill employs 200 workers, operating a large and small log line dating back to the 1940's. There were a few modifications installed over the past 20 years, but not many. EB Eddy purchased the mill from Lajambe Forest Products in early 1995.

AGAWA operations manager, Juhani Pulkkinen, says the mill operates this way. The mix of 60 percent white pine sawlogs, and 40 percent hardwoods are firstly sorted in the yard for diametre. The mill produces lumber from white pine for two weeks, then hardwood for two weeks. As a result of last year's changes to the supply of crown wood, AGAWA's fibre mix will change to 60 percent hardwood, and 40 percent white pine, representing a two week hardwood, one week white pine production rotation.

The logs are conveyed through a Nicholson ring debarker, and the debarker operator decides if the logs enter the number one or two line, that each feature double cut band saws. The number one line accepts logs 14 inches and up and is used for grade sawing. From there, the logs enter a horizontal resaw edger and trimmers. Logs entering the small log line are simply broken down to a six inch cant, run past a bull edger and trimmers, and then into the green board way. Many decisions and tasks are still handled manually at the AGAWA mill. That is about to change.

Pulkkinen has spent considerable time touring other sawmills and addressing AGAWA's main priority, that is developing a log profile from an extensive inventory conducted on their Crown leases. They want to ensure that changes they make to the mill will reflect their log supply. Among their findings so far is that they can expect considerably more pulpwood and hardwood. They will harvest many more smaller and larger logs than what historically were prime quality pine sawlogs.

What EB Eddy has also discovered is that AGAWA's future depends on the pursuit of quality over quantity.

The future is in manufacturing hardwood lumber in predetermined sizes and specifications for flooring material and special furniture. "We have identified a flooring mill in our capital plan," says Pulkkinen. The future indicates a bountiful supply of tolerant midgrade hardwood logs. "With the volume that will be coming in for the next years, we are going to develop a lot of flooring stock, which means we could supply a small flooring mill with all our own material." Litchfield confirms EB Eddy has had 'very serious discussions' with other companies about the potential of manufacturing flooring material, and how the mill should be designed to accommodate it.

Pulkkinen adds that current production is about 30 million board feet per year, and they hope to sustain that with plant modifications slated to take place over the next two years. AGAWA has already begun its new pursuit of quality. They have trained their own staff on proper log preparation prior to entering the mill, and they have hired a quality control person to conduct random quality control checks in the yard.

The second step is to install laser scanners at the mill's front end. "We're looking at log scanners right now," says Pulkkinen. "It will have the capability to tie into our bands and into our edger. We are looking at optimizers at the edger and head rigs to get the most off the log."

AGAWA will continue to operate their large log line to saw quality logs and maximize value. Most initial changes will occur on the small log line. "We felt that with a drop in log size -- smaller logs, and rougher logs -- that what we require is to replace the number two side with something that would have significant throughput to reduce our costs," says Pulkkinen. "What we are look at is a twin band into a bull edger." They have yet to identify the optimum log size in order to refine their small log line equipment selection. What will happen, however, is that the current manual sorting system will be replaced by either a sling sorting system or a J-bar system.

Pulkkinen says they anticipate some job loss, but those employees would most likely be absorbed in other departments. One area where they will be increasing employment is in their veneer plant. "The veneer plant had been limping along here," he says. "We're going to be bringing it into a full shift, so it will create additional employment. We will add 20 to 30 people there." Among improvements slated for the veneer plant are an X/Y positioner to improve recovery and value, as well as rotary clippers. That is part of the overall modernization, and will cost $3 million.