Medium-sized producer Wynndel Box & Lumber has moved into the value-added market with a pre-finishing facility.
By Paul MacDonald
For Wynndel Box & Lumber, a medium-sized value-added producer in southwestern British Columbia, the relatively healthy US housing industry over the past five years has been good news. The company has been hurt by the softwood lumber dispute with the US, and the resulting countervail, but things could have been even worse for Wynndel and orther producers if housing starts in the US had fallen substantially. While Wynndel continues to ship to markets in Belgium, Japan and Australia, it sends the majority of production directly south to US reloads from the community of Wynndel, about 15 kilometres north of the border at Idaho.
Its value-added trim and siding products made from spruce, pine, fir, Douglas fir, larch and inland cedar are used in housing construction and sold in markets from California to the US Midwest. Jack Wigen, the third generation of the family to head up Wynndel Box & Lumber, is like everyone in the Canadian forest industry in that he would like to see a permanent and long-term solution to softwood lumber trade with the US.
But he quickly notes that the Canadian industry should not just accept any deal, and it should be especially careful about the impact a settlement would have on the value-added industry. While the industry has been divided at times about what approach to take on the softwood dispute, there is a strong feeling that no deal is better than a bad deal. That is especially so if any kind of tax were to be applied to the value-added portion of a product, rather than just the lumber.
That is of special concern to Jack Wigen, and son Michael, who now runs the Wynndel operation on a day-to-day basis. “We need to be very careful about what we agree to if we want to do more with our wood,” Jack says. “Value added is not going to work unless it’s a level playing field.” His concern is understandable.
Two years ago, Wynndel made a million dollar investment in new value-added equipment, with the addition of a new acrylic emulsion vacuum priming and pre-finishing facility. “That’s the newest addition for us,” says Jack. “For years, one of our biggest markets was rough-faced fascia and trim.” But products such as vinyl, aluminum and engineered wood have all made dents in this market. “All these products come with a wood grain finish, and with a primer coat,” he explains. “We decided to make the investment to get involved in turning out pre-finished product, wood that is already primed.”
The new equipment for this integrated system, made up of a feed table, the vacuum and heaters, was supplied by Advanced Manufacturing & Development (AM &D) of California, and it is the first such system in Canada. There are only a handful of these set-ups in the US. From the mill, wood is kiln dried to an average moisture content of 12 per cent.
It is then fed into the vacuum unit—which has a slightly larger template than the profile for each type of product. A suction system controls the depth of paint coverage, usually from 2.5 to 3 mils of a Fargo 2000 acrylic co-polymer which gives the wood a low sheen finish. The thermally activated resins in the primer are set using an infrared gas dryer, with temperatures of up to 1,500 degrees Fahrenheit. The wood emerges and is dry enough to pile. Product is available in lengths from 10 to 16 feet. “We’re happy with the system,” says Jack, who notes that it is light years away from the limited dip tank priming they had occasionally done in the past.
By early 2003, they would like to get to the point of developing the market so they can run the pre-finishing operation on a two-shift basis. While the new product has not been a runaway success, Jack and Michael realized in advance how tough it was going to be to break into new markets. “We’ve all heard the value-added term ad nauseam,” says Jack. “It’s fine to talk about it, but we spend a lot of time looking for value-added products.
And you have to realize when you do go ahead with a new product for the company, if it’s not entirely new—if it’s something that somebody else is making now—that company already has a piece of that market. So it takes a lot of money for you to come along, tool up, and get into that market to displace somebody.” Wynndel is also modest in its goals. With its new primed trim and siding product, it is not out to completely displace a competing product—it simply wants to secure a piece of the market.
A growing market would be easier to enter—that would mean moving in and securing business due to increased demand for a product. But the market is currently only holding its own, despite a good US housing market. “It’s not a matter of getting a piece of a growing pie. It means displacing somebody who is already in the market.” Jack adds that it is difficult to find new value-added product that will meet with success in the market.
He notes that the BC government has encouraged mills to move into value-added production. “We’ve seen several different types of government programs over the years,” he says. But despite government efforts, the BC industry remains dependent, in large part, on dimensional lumber due to the competitive nature of the value-added market.
Wynndel continues to look at other business opportunities but being a medium-sized company, it has to pick and choose them carefully. It does not have the deep pockets of large forest companies such as Canfor or Domtar. That approach has suited the company, however, considering that it has been around since 1913. It got its start producing boxes—hence the company’s name—for the local fruit industry, using a small portable mill. Over the years, the company has grown and expanded, and now produces a wide variety of fascia, trim, decking, boards and patterned stock.
Other products include SPF boards, fir boards, lamstock, molding grades and full sawn rough timbers and cedar products. The board market, in 7/8 inch, has always been the focus for the company, although it does a small amount—about 10 per cent of production—of dimension lumber, largely in 2x4 and 2x6.
The forests from which Wynndel Box & Lumber draws its timber—in the Purcell Mountains of southwestern BC—are among the most productive in the province. But the area, not far from the environmental hotbed of Nelson, BC, has seen a lot of pressure. In the last decade, protected set-asides have more than doubled, reaching 21 per cent of the land base.
Their Crown cutting rights provide them with about 60 per cent—about 63,000 cubic metres—of their annual requirements. Wynndel has a basic crew that does roadbuilding, but the harvesting is done by local contractors Mel Faurot and Ed Draper. They have some private land, which supplies about 10 per cent of their needs, with the balance being purchased on the market. Like other mills that have a broad product line, Jack Wigen says the company has to be flexible to meet market needs, but it also obviously needs to be efficient.
Being flexible and efficient requires some juggling. “If you want to be the most efficient, you’d be locked into producing one thing.” The most efficient operations are the large dimension mills, which have economies of scale, quickly turning out a narrow range of product from consistent-sized logs.
But Wynndel, for example, has three debarkers to deal effectively with their timber—one for regular-sized logs, another for oversized and a rosserhead debarker for handling stringy cedar. “We also need 120 people to handle the timber we process,” explains Jack. “If you sent the amount of timber we use to a dimension mill, they could handle it all with 35 people. That’s the value-added difference.”
But putting all your eggs into the dimensional lumber basket is not necessarily a good business plan for a smaller producer, he adds. Jack Wigen continues to be involved with the business today, although son Michael has taken over as general manager. He still finds it an interesting and challenging industry to be in half-a-century after starting out on a green chain. “Sometimes this business can be awful,” he says, “but it’s never dull.”
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