-- Added Value --
BC reman operation Leslie Forest Products is making the most out of all of its fibre, installing a new chipper to handle falldown material.
By Paul MacDonald
Even though lumber remanufacturer Leslie Forest Products has been hit by the same tough business conditions that have affected much of the British Columbia forest industry, you could say that company president Ron Sangara and his two brothers, Serj and Dave, subscribe to the theory that when the going gets tough, the tough get inventive.
"A philosophy that we try and carry through with the company is that every problem situation truly does present opportunities," says Ron Sangara. "Its really up to us to go out there and find out where those opportunities are."
The latest example of that is the $700,000 the company recently invested in a Nicholson 53-inch, eight-knife disc chip-per and associated equipment, including a Duraquip screen. Sangara says the company is one of the few reman operators in BC to take falldown material from production and chip it. It may in fact seem odd to branch into the chipping business when pulp prices are just bumping along, but Leslie Forest Products is focussing on producing a higher quality chip that commands a premium price over regular chips.
They have to work hard at getting quality chips since, as Sangara explains, the pieces going into the chipper are hardly ideal, even though the end product is what the pulp mills are looking for. "The wood that goes into the chipper is probably the worst wood, even though the end product is superior." The short pieces going in come complete with big knots and splits. "We only send the wood to the chipper if there is no possible way we can get anything else produced out of it."
With short wood, the pieces can get turned around in the chipper, resulting in over-sized chips. The Duraquip chip screen was installed to take out these larger chips, which are then run through the chipper again to meet the desired 7/8" size.
The chipping operation is also an example of how Leslie Forest Products is seeking to get further value out of every stick of lumber that comes into the reman plant in Delta, BC, just south of Vancouver.
"Weve had an ongoing program of trying to get more out of the wood we get from the primary producers we deal with," says Sangara. "We produce wood for lath and dunnage stock and kiln sticks, which is the cornerstone of our business. But now, we are getting much more, such as finger-joint blocks, clear pieces, and standard and better 2X4s." Theyve gone from producing a small number of specialty products to the point where their trimming systems might be turning out up to 40 different products, based on sizes and species, and depending on market demand.
"Its part of a continuous program of getting more and more out of the wood," says Sangara. Over the years, theyve expanded the operation to the point where they are now producing 30 million board feet a year, a huge jump from the one million board feet capacity they started with in 1972.
By far the bulk of the lumber that represents the feedstock for the company comes from local mills, such as Primex and Interfor operations. These companies are also customers for the thousands of kiln sticks and lath pieces Leslie Forest Products turns out on a daily basis.
Some of the wood, such as hemlock and fir, go through the reman system once for producing lath stock and kiln sticks. But the high-value western red cedarup to seven million board feet a year may end up going through the molder, then be sorted and put through two rip saws. The end result may be 1X1 pieces that could go directly to a Home Depot outlet, or it could be sold to another added-value manufacturer and used in producing fence panels or trellises for the garden market. "You could say we end up turning out a byproduct of a byproduct of a product," says Sangara. "But in the end, it adds a lot of value to the wood."
Continuous improvement is part of the strategy, especially on the equipment side, for the company. The operation has four millwrights, but only one handles the day-to-day operating side of the mill. The other millwrights, in addition to helping out with the ongoing work, are charged with adding on to the existing equipment and essentially "tweaking" the operating efficiency and production of the mill. Their focus for the last year has been the chipper, but they are now working on building a stacker to take over the task of manually stacking the wood at the molder. Future projects may be a dry kiln, a finger-joint operation or another planer. "Weve been very successful in improving our operations, thanks to millwrights like Rob Bengough and Rick Voigt," says Sangara. "Weve got some other things planned for the future."
In the case of the automated stacker, the operation is not trying to eliminate a worker they simply want to optimize their skills. If the repetitive or mechanical tasks can be done by machines, this frees up a worker to do more value-added work that best utilizes his skills and knowledge.
In fact, Sangara credits the good relationship Leslie Forest Products has with its unionized work force as one of the main reasons for the success of the company. "We have a number of people on staff who have worked for us for over 25 years and never been laid off or been sick for a single day. When you have people that stay with you like that, you dont face a training problem."
Management tries to take a proactive approach to dealing with workplace issues, wherever possible resolving them long before the union grievance process kicks in. "Weve tried to create an environment where our people in the mill can talk with us and work things out." Sangara and the management group have a refreshing approach in labour relations, especially compared with the "old school" approach that "management never makes mistakes."
"We are not always going to be right," he says. "And if were not doing some-thing right, were more than willing to change what were doing or how we are doing things."
While becoming involved in producing pulp chips and taking production up the value-added chain has helped Leslie Forest Products, the company is careful not to get off track from its main products of kiln sticks and lath and dunnage stock.
"Our market niche is certainly in lath product," says Sangara. Over the more than 25 years they have been in business, theyve seen companies come and go in the lath market. "Why have we been able to stay in business? We work very hard at having a good relationship with our lumber suppliers and customers, like Primex and Interfor. We are steady customers for their wood. Even when things are a bit slow, we still take the wood because we value the business relationship."
After close to three decades in business, Sangara and his family know only too well the cycles the forest industry goes through. When things are going well, they put extra effort into investing money back into the business. This approach of financing equipment improvements internally through profits means they dont have to approach banks for funding, leaving them in a good positionand with no loans to be paid backwhen lumber markets drop. "Other than the first four or five years after we started, weve never had to be in to the banks for a lot of money."
Even though Leslie Forest Products is producing primarily for local lumber markets, the collapse in the Asian economies, and the resulting drop in lumber sales into that market, has had a ripple effect. "Were affected indirectly," says Sangara. "In terms of sales, the more lumber our customers produce, the more of our product they are going to need, such as kiln sticks. Weve seen mills shut down, such as Canfors Eburne operation and Interfors Squamish operation, and that affects us big time. These operations sup-plied us with product and they were also customers for our products. So, weve had to make adjustments along the way."
The end result, at least in this product area, is that the company is dealing with fewer operations for supply and has fewer customers for its products. "Weve always valued our customer relationships, but this kind of situation makes them even more important."
If, as Sangara says, problems bring opportunities, there are further opportunities for reman operators in the future. Leslie Forest Products faces the challenge of off-shore producers of kiln sticks from Asia and Chile getting into the North American markets. At one time, Canadian lumber producers had traditional markets that they could count on, year-in, year-out. But lumber producers from Chile, Europe and Scandinavia are jumping into markets that are new to them, clearly reflecting the globalization of the industry.
"We are optimistic about the industry, otherwise we wouldnt be making investments like this chipper," says Sangara, who is also past president of the Independent Lumber Remanufacturers Association of BC, which represents more than 40 independent lumber reman operations. "We think there will be steady growth and even some new market opportunities in the next few years.
"Those opportunities will not come with-out a lot of sweat and effort in developing new markets and new products and adding new equipment. We have to get out there and grow the business. Rather than worry about how bad things might be, we have to get out there and hustle."
Knowledge of the business and markets will also be key to developing these opportunities. Ron and his two brothers, Dave and Serj, know the business inside out since they all started working at their fathers lumber operation when they were still kids. In fact, Jagindar Sangaras mill was directly behind the family home on Mitchell Island, situated along the Fraser River. Like the kid who learns how to run the tractor on the family farm at a very young age, the Sangara sons were out driving forklifts and operating headrigs for their dads operation long before they hit high school.
That kind of background, and the knowledge of Jagindar Sangara to draw on, pre-pared them well for the division of responsibilities they now have in running the company. Dave runs the mill and handles the order flow, Serj handles sales, while Ron Sangara describes himself jokingly as the "jack of all trades".
"Its worked out well," says Ron, "in that our skills complement each other."
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