Ontario softwood mill Cheminis Lumber has been able to bounce back from a fire, thanks to its focus on specialty markets and solid employee efforts.
By Tony Kryzanowski
Back in the days when the gold veins ran deep and wallets were fat in the mining town of Kirkland Lake, Ontario, forestry played a minor role in the local economy. But mining has taken a turn for the worse lately and sawmill owners like Steve Bougie count their blessings for the stability offered from being involved with a renewable resource with more steady markets.
Bougie and partner Rick Nychuk purchased Cheminis Lumber in 1995. Cheminis is a specialty product sawmill that for many years supplied the local mining industry exclusively with timbers for mine developments. Today, however, it is much more diversified in its products and markets. Located east of Kirkland Lake near Larder Lake, the mill uses only softwood. While the sawmill has a long history, it almost all came to an end when fire broke out on November 17, 2000, leaving the 19 employees who showed up for work that morning wondering if there would be money for Christmas presents that year.
"A lot of our employees started with us right from the beginning and could see the growth occurring in the company," says Bougie. "So the fire had a traumatic effect on them." An undetermined and accidental fire started in a garage next to the sawmill, and ultimately caused about $2 million in damage. By the time the fire department arrived, the sawmill and adjacent garage were destroyed. Thankfully, the wood supply didn't catch fire and the mill was partially insured.
By mid-April, the sawmill was back in business as a result of an aggressive and costly winter re-construction program. Employees continued to earn a paycheque by either helping to rebuild the mill or filling customer orders using a portable sawmill. Bougie and Nychuk decided to rebuild as soon as possible to maintain good client relations. The need to rebuild immediately meant that new equipment was out of the question. So the company's maintenance superintendent, Rejean Beaudoin, was sent shopping for quality reconditioned equipment.
"There's a difference when you are a private company versus a big corporation," says Bougie. "There is only so much time and money to do things. It was important for us to get going quickly because of our wood supply and to meet the needs of our customer base for the spring market in southern Ontario." The sawmill has the unique ability to saw lumber up to 24 feet long in any dimension. Although the mining industry still consumes about 20 per cent of its production, the rest is targeted for other uses such as landscaping, the pole barn industry in southern Ontario and signposts.
The company's markets are exclusively Canadian and for many of its customers there is a benefit to purchasing green timber. For this reason, there is no need to install a dry kiln at the sawmill, although wholesalers downstream eventually dry a portion of it. Another developing market for Cheminis Lumber is cottage owners. The company's ability to manufacture large and long timbers comes in handy for special beams in cottage construction. While rough 2x10's represent the majorty of the mill's production, it has discovered a strong market for 6x6, 6x8 and 4x4 timbers as well.
Bougie says the combination of his partner Rick Nychuk's logging experience and his own contacts in sawmilling have helped the company flourish in the specialty market. Bougie's experience includes nearly 15 years working for a local sawmill company, Normick Perron, first as a mill superintendent and later as a woodlands superintendent.
However, a short stint at Cheminis Lumber in 1991 showed him the potential of this mill. Bougie says returning to Normick Perron as a woodlands superintendent provided him with the field experience he required. At about the same time, he began looking for a potential partner and ultimately formed a partnership with Nychuk to purchase Cheminis Lumber.
And it has grown since. "When we took over, we took the mill from five million board feet annually to 10 million board feet, with some minor changes and a good wood supply," says Bougie. He was able to tap into his industry contacts to increase the wood supply to the mill. In terms of wood supply, Cheminis Lumber is a shareholder of the Timiskaming Forest Alliance.
The sawmill contracts Nychuk's logging company to provide it with 30,000 cubic metres of softwood from Alliance forest holdings. Its remaining 20,000 cubic metres are purchased from private sources, primarily OSB manufacturer Grant Forest Products in nearby Englehart, Ontario. Cheminis Lumber has a positive relationship with many high production softwood lumber mills because it purchases their oversized wood. Most sawmills chip oversize logs because they can not efficiently manufacture lumber from them.
Cheminis Lumber, on the other hand, is manufacturing a higher value product by using its specialty equipment to produce a wide variety of wood products. They also exchange smaller logs from their holdings for larger logs from pulp and paper manufacturers. About 50 per cent of the sawmill's wood diet is jackpine, 45 per cent spruce and 5 per cent balsam fir.
Bougie says they manufacture specialty products from logs six inches in diameter and larger, and try to avoid production of popular commodity products such as 2x4 studs. "There is no way that we can compete with the lumber giants," he says. The two partners know their markets well and a lot of the large mills have gone away from unique markets-such as those Bougie and Nychuk want to tap into. He adds that there are advantages to their wood manufacturing approach.
"The specialty market doesn't have the ups and downs of the commodity market. Price and demand are always fairly consistent. We produce wood products according to exact customer specifications." The company has realized significant handling efficiencies by producing large dimension timber products in various dimensions-versus smaller dimension lumber-simply because there are fewer pieces to handle.
Over the past six years, the sawmill has established a solid client base. About 90 per cent of its production is pre-sold. "We were very fortunate that we didn't lose our customers after the fire," says Bougie. "That's largely due to the quality product that we deliver to our wholesalers." However, filling customer orders can be complicated. "Every week, we are sawing something different for a different customer," he adds.
In many ways, production at the Cheminis sawmill resembles a medium size hardwood mill, with its many dimensions and quality standards. One positive the company can take from the fire is that its production capacity has increased with the installation of new equipment, from 9.5 million board feet to about 11 million board feet annually. Improving the mill's manufacturing capability from 20 to 24 foot lengths has also opened new markets.
After starting production at the new sawmill in April, the company was already improving on the previous year's production numbers, due mainly to staff effort. A Liebherr 2000 log loader both unloads trucks and delivers logs from the stockpile to the mill. A KBR pedestal log loader feeds tree length logs into the sawmill. They proceed through either a 26-inch or 14-inch Forano debarker, depending on log diameter, then to the slasher station where an operator slashes logs based on customer demand and best fibre recovery.
Logs eight inches to 48 inches in diameter proceed to the Morbark carriage line, which provides the sawmill with the ability to manufacture a wide variety of products up to 24 feet long. Smaller logs proceed through a Forano twin saw, capable of manufacturing products up to 20 feet long. The cants from both lines continue through a PHL eight-inch double arbor bull edger. All lumber products then converge to a single sorting line that leads to a Forano trimmer, capable of trimming products as large as timbers up to 12 inches square and 24 feet long.
The lumber is sorted manually. "We produce so many products and lengths that manual sorting is the only way to do it," says Bougie. Cheminis Lumber also has a new planing facility, featuring a Woods 412 planer and a Newman adjustable trimmer. Bougie says a planer mill gives them the flexibility of marketing either rough or finished lumber. The company also owns two Komatsu WA 380 wheel loaders.
Fibre utilization is high for the operation, as bark is shipped to Kirkland Lake Power and burned to produce electricity. A particleboard plant in Huntsville called Panolam takes the company's sawdust, shavings and slivers. Jackpine chips are sold to Tembec in Smooth Rock Falls and spruce chips are sold to Abitibi-Consolidated in Iroquois Falls. Steve Bougie understands that success in business in often determined not necessarily by working harder, but by working smarter. For example, Cheminis Lumber is looking forward to plans to improve Toronto's waterfront, even though that city failed in its bid to attract the Olympic Games, as many of its products will still be used in this massive landscaping project.
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