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A 2X4 Window of Opportunity

While the Japanese market may currently be in the doldrums, the largest builder of 2X4 constructed homes in Japan is creating export opportunities for Canadian mills by reprocessing Canadian NLGA-graded softwood lumber to JAS grade.

Copyright 1998. Contact publisher for permission to use.

Mitsui Home Canada, in Langley, BC, is providing an export marketing opportunity for numerous Canadian CLS mills by purchasing their standard grades for reprocessing to the Japanese Grading Standard (JAS), to be used in 2X4 home construction in Japan.

Mitsui Home Canada has built its wood products specialty plant about an hour outside of Vancouver, in a modern industrial park near Langley, BC. This four-year-old plant represents a commitment by the parent company, Mitsui Home Co. Ltd., the largest builder of 2X4 constructed homes in Japan, to use Canadian CLS lumber. This new facility provides Canadian mills with an export window of opportunity for their products - sawn and graded primarily for North American consumption.

Mitsui Home Company in Japan was formed back in the 1970s, when the Council of Forest Industries of BC began promoting platform-frame house construction. The 2X4 system, as it came to be called, has many benefits over the traditional post-and-beam home-building system, still widely used in Japan. It takes less time to build and lends itself readily to the use of prefab components. It is also better able to withstand earthquake shocks. While preferences for building styles are slow to change, in recent years 2X4 construction in Japan has shown spectacular growth, fostered by its benefits and by other factors, such as the rapid decline in availability of export softwood logs. These export logs are a primary source of supply for Japanese mills, which offer the complex lumber specifications required for traditional construction.

Two-by-four construction now represents about 13 per cent of wooden home construction in Japan, some 90,000 units in 1996. The potential to increase is substantial, and represents, for North American lumber producers, a potential export bonanza. However, the downside is the Japanese grade requirement.

The original idea was to promote the use of standard CLS lumber, but the Japanese developed their own (JAS) grade, which is more stringent with respect to appearance defects such as splits, wane, white speck and knot size. Accordingly, to produce any quantity of JAS-grade construction lumber, a Canadian mill must substantially change its production process, sacrificing recovery or rate of production, or both.

This is where the value of the Langley Mitsui Home plant comes in. The purpose of the plant is to purchase KD SPF (No. 2 & Btr. and Std. & Btr.), CLS lumber, 2X4, 2X6, 2X8, 2X 10 and lumber 8' to 20' in length, and, by regrading and remanufacturing, convert as much into JAS grade as possible. Supply for the Langley plant comes from BC (60 per cent), Alberta (33 per cent), and Quebec (seven per cent), and arrives either by rail or truck. The plant processes about 50 million board feet per year, about 50 per cent of Mitsui's SPF requirement. While all buying of SPF is now handled by Langley, the other half is reprocessed in Japan.

The commitment by Mitsui Home Company to Canadian lumber goes back to 1979, when the company established a local purchasing office in Vancouver. The purpose of this office was to develop a relationship with Canadian suppliers and co-ordinate shipment of NLGA-graded CLS lumber to Japan. To overcome the grade problem, the company purchased lumber to be re-processed in Japan at several locations. This was found to be costly, however, and it was difficult to find a market for rejects.

In 1992 it was decided to build a reprocessing plant in BC. A 12.5-acre site was selected in northwest Langley. Ron Neil, a former senior lumber executive with Fletcher Challenge and BCFP, was employed to design and build the plant. When it became operational in 1994, Neil stayed on as senior vice-president.

This is a model plant for several reasons. One is the efficient and unique system in the plant for regrading and remanufactuiinc, CLS lumber to JAS grade. The other is the effort made to have the best employee-management relationship possible. Both are equally important to provide the kind of quality standard required for the Japanese market.

With the desire by Mitsui to establish a good corporate operation within the community, Ron Neil had an opportunity to put into practice many of his labour-relations ideas, along with some Japanese concepts. "We also did physical things in the plant to improve appearance and employee attitudes - items generally resisted in BC because of cost," said Neil.

The first impression reveals a very clean building and yard. Built by Permasteel, who also acted as general contractor, the building has a light-coloured metal cladding. Grey cement brick was added to cover the walls up to 8' from the ground, to conceal the unavoidable scrapes and dents that result from truck and forklift movement.

Considerable attention was paid to making the plant a pleasant place in which to work. Instead of the usual dark red oxide paint, the inside of the plant was painted white. For further light, skylights were incorporated in the roof and extra windows were installed on the north side.

To underline that all workers are equally important, several thoughtful procedures were established. For example. all employees enter and exit through the front door of the plant office. Parking is on a first-come, first-served basis, with allocations for visitors only. Management and employees use the same lunch room.

Hiring practices are based on intensive interviews and aptitude testing, and a plant employee is included in the screening process. Neil believes that employees must think differently about supervision and management. The title of 'supervisor' has been changed to 'team leader', and all employees are given a description of the team leader's job.

Good communications amongst all employees (both plant and office) and respect for each individual are strongly encouraged. These steps have helped employees understand the importance of their role. "It is critical in this plant for employees to work together as a team, and to understand the Japanese quality standards. Employee relations are not yet perfect, but we have come a long way, and are working continuously to make it better," says Neil.

The plant has a normal complement of 30, which includes seven office and 23 plant workers. These numbers can vary with the strength of the Japanese market. When the market was strong in 1996, the work force expanded to 43 on a two-shift basis. Plant workers include both temporary and permanent status, and the latter are paid on a salary basis.

The plant itself is spacious and the regrade line is entirely computer-controlled. Most equipment was designed and installed by Newnes. The plant operates on a batch basis by supplier, size and length. The process starts with a forklift tow motor loading a package of lumber onto the infeed line. A tilt hoist automatically spills the packages so that individual pieces are unscrambled onto a moving lug line. The line moves quickly, at up to 80 lugs per minute.

Lumber first passes under a Coe moisture meter to check the moisture content of each piece to ensure it is within the allowable tolerance. A grading station follows with up to three certified JAS graders inspecting every piece. There are four basic sorts. The primary sort is for pieces that meet the JAS grade standard; they move straight through on the A-1 line to an automatic stacker. The other sorts are for acceptable JAS after trimming, remanufacturing or rejects for resale in the local market.

Pieces marked for trimming have 2' sawn from either end, and they drop to the A-2 line for automatic stacking. Experience has shown Mitsui that defects usually occur within 2' of either end for pieces that are otherwise JAS grade. Pieces on these first two lines are marked automatically with a JAS No. 2 grade stamp.

Lumber marked for remanufacturing is directed to the B-line. If it is 2X4 lumber, it is subsequently remanufactured on the chop saw, where it is cross-cut into shorter useable lengths. If it is 2X6, 2X8 or 2X10, it will be remanufactured on the splitter saw, where it is sawn back to a narrower width and then re-processed on the regrade line. For example, a 2X10 can be split into two-2X4s and a 2X2.

The 2X4 is regraded and the 2X2 is either sold to Japan or to local remanufacturers. Good 2X4s for regrade can be cut in half if full-length sweep and crook exceeds the JAS standard, so that either one or both halves make JAS grade.

Short lengths of suitable grade are recovered and fabricated with nailing equipment into doorway headers or two-, three- or four-piece posts

Lumber rejected for local sale is graded and marked either "No. 2 & btr." or "C-grade", and automatically drops to the C-line for stacking. Here the NLGA grade stamp of the supplying mill is obliterated and the Mitsui grade stamp is applied.

The A and B sorts are connected to the packaging line where packages are squared with end and side presses before paper wrap and steel strap is applied. In the packaging line, no detail is overlooked. Packages have an attached sticker on the bottom, and are held in place by the steel strap. Three lengths of stickers are available, to fit the exact width of packages, so that stickers do not protrude beyond the package sides.

The recovery from each batch is automatically recorded and is analyzed to guide future purchases. Through reprocessing, remanufacturing and fabrication, about 85 per cent is recovered for use by Mitsui in 2X4 homes in Japan.

Ron Neil acknowledges that the market in Japan is currently very slow. Plant operations have been curtailed and, in the meantime, some custom work has been undertaken. Downtime has been used to schedule employee training sessions.

The forecast for housing starts in 1998 in Japan is 1.3 million, about 15 to 20 per cent below a normal housing year of 1.5 to 1.6 million. According to Marc Boutin of Widmans World Wood Review, annually rated starts so far this year indicate closer to 1.2 million. While it is still too early to see a pattern for the year, housing activity may pick up in the second half of the year, in response to a number of government actions to stimulate the economy, and to restore consumer confidence.

Ron Neil

Ron Meil (right), senior vice-president of Mitsui Homne Canada.

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