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November 2006 - The Logging and Sawmilling Journal

CONTRACTOR PROFILE

DOING IT THEIR WAY

Whether it involves harvesting timber, building logging roads or expanding into the mining and energy industries, BC’s Blackwater Construction has its own way of doing things—a way that continues to pay off with success.

By Jim Stirling

Blackwater Construction Co Ltd, has its house well in order. And because of that, this log harvesting and general contracting business is in a good position to aggressively seek opportunities to grow and diversify. The self-reliance factor is built around Blackwater’s people, the tenure it has acquired and the company’s structure and capacity.

“We’re a very self-sufficient company,” states Terry O’Neill, Blackwater Construction’s president. “I know that I can count on myself and my people, and that we do a better job if we are self-sufficient.” This approach allows the company to do a professional job on whatever work it takes on, he adds.

Blackwater Construction’s origins date to the early 1950s when it was active in bush sawmilling and logging in the Prince George region of central British Columbia.

By the late 1970s, the company had a small quota attached and had been acquired by Jim Rustad, a well-known Prince George lumberman. Blackwater later evolved into a Rustad Bros. company logging crew, and that remained its status after Northwood Pulp & Timber acquired Rustad. O’Neill recalls that the company established a reputation—early on—for harvesting the steep, tough sites.

O’Neill purchased Blackwater from Northwood in 1998 and began applying the principles that remain at the company’s core. “We bought more and more equipment and we do our log harvesting, road and bridge construction internally with our own crews,” says O’Neill.

Terry O’Neill, president of Blackwater Construction (right). Since taking over the company, O’Neill has grown the equipment fleet from 10 pieces to more than 30 pieces, including a Madill 800 equipped with a Waratah 622B processing head (top photo).

The equipment fleet has grown from 10 pieces, when he acquired Blackwater, to more than 30 pieces today. The company has an annual 200,000 cubic metre replaceable contract with Canfor (which bought out Northwood) and an equal volume in non-replaceable contracts. The wood is cut to length at the stump. “Canfor has been a rock, a very straightup company for us,” credits O’Neill. “They can count on us and we can count on them.”

Blackwater Construction also harvests wood for other regional licensees including Carrier Lumber Ltd and Dunkley Lumber Ltd, and augments its cut with private wood volumes.
“We harvest a total of about half a million cubic metres a year; that’s my target, and we’re comfortable with that,” reports O’Neill, who has chalked up 31 years’ experience in log harvesting, construction and business management.

Blackwater Construction made the major switch to cut-to-length from long-log harvesting more than a year ago, largely in response to the mountain pine beetle epidemic ravaging the BC Interior. It was an opportunity to move into a different type of harvesting system, he explains. Part of that includes running forwarders across limb mats to gain more harvesting days a year.

Blackwater has been operating in areas where the pine is 100 per cent dead; consequently, the timber is not taking up water resulting in wetter harvesting sites. That is, until the summer of 2006, which in contrarian fashion, was exceptionally dry and entirely different, says O’Neill.

Much of Blackwater’s fleet of industrial equipment has typically been drawn from Finning, the Caterpillar dealer, and Madill.

For example the equipment fleet includes two Cat D8 crawlers; two 527 skidders, a 525 and a 535; a 320C processor, log loader and four Cat excavators. Madill has supplied four feller bunchers, including a 2250 with a 360 degree head and three Madill butt ‘n tops. Recent equipment additions include four forwarders, two Valmet 890s, and a Tigercat to complement an older Timberjack 1210 which doubles as a training machine. Blackwater also added a Komatsu zero tail swing excavator for working slopes.

A dispute in parts of the central Interior last winter between log haulers and licensees over rates and working conditions resulted in a strike when little wood moved. That helped precipitate Blackwater into the log hauling business. It acquired—mainly from retirees— four Kenworths and one Peterbilt logging truck in seven- and eight-axle configurations, along with a Western Star lowbed. Blackwater pays its truckers by the hour, not by the load or tonne.

The move into trucking is a further indication of Blackwater’s desire to maintain control of its own industrial destiny. Similarly, Blackwater has dedicated five people to do its mechanical work, welding, maintenance and repairs on its equipment fleet, adds O’Neill. It works. “We try to get at least five years' work out of our equipment.”

In addition to logging, Blackwater Construction also takes on roadbuilding and bridge building. The company has built more than 150 bridges, ranging from six-metre log stringer structures to 30-metre, 100-tonne concrete/composite crossings.

Selecting it right in the first place plays an important part in equipment performance and longevity. “Probably at the top of the list is who’s going to service the equipment, who is going to look after us best. Secondly, what’s the best piece of equipment available for the job. Operator acceptance is probably next. Then we’d be looking at the price,” summarizes O’Neill.

Constructing forestry roads is a core part of Blackwater’s activities. In any given work season, two crews will typically be kept busy building between 70 and 100 kilometres of road. In the last five years or so, Blackwater has also built more than 150 bridges, ranging from six-metre log stringer type structures to 30-metre, 100- tonne concrete/composite crossings. “We frequently work closely with biologists, engineers, licensees and ministry
personnel to achieve the best structure design and installation with the lowest impact to water and fish resources,” says O’Neill.

The company employs up to 80 people, including about 20 full-time subcontractors. O’Neill tries to keep them busy for 10 months of every year. “We pay very close to industry leading rates and have always had a pension plan and benefits,” he points out. “We’ve attracted good people and kept good people.”

The company’s management structure includes six key supervisors in the various divisions. But what makes them additionally flexible is they’ve all been cross-trained. They can all run a log harvesting operation, build bridges or put a roof on a building, explains O’Neill. “They’re good at multi-tasking and enjoy different challenges.”

Blackwater Construction made the major switch to cut-to-length from longlog harvesting more than a year ago, largely in response to the mountain pine beetle epidemic ravaging the BC Interior. The company’s forwarder lineup includes two Valmets, a Tigercat and an older Timberjack.

O’Neill finds the time to remain active with the Central Interior Logging Association (CILA). As one of the organization’s vice-chairs, O’Neill works with regional logging contractors and mills on trucking issues. He’s also helping develop the BC Forest Safety Council’s qualified companies initiative.

“There’s a need to be political and be involved, and the CILA has been a strong ally for us and we support them where we can,” explains O’Neill.

Blackwater Construction has been expanding in new directions while maintaining and enhancing its forest industry legacy. “My business goals are to diversify and that’s my challenge right now,” he says.

In 2005, Blackwater Construction took on a time-pressured contract to harvest about 80 hectares of spruce and balsam fir, and prepare a similarly-sized parcel of non-merchantable ground. This was part of a coal mine development at NEMI Northern Energy & Mining Inc’s Trend Small Mine site, south of Tumbler Ridge in northeastern BC. O’Neill says Blackwater deployed about 10 pieces of equipment on the project including articulated rock trucks, excavators and crawlers.

He predicts considerable expansion in the BC mining industry. It’s a similar story with oil and gas. “We’re trying to get more into the oil and gas industry. There are opportunities there. There are lots of doors to knock on and it does take time, including training people to deal with the specifics of the industry,” outlines O’Neill.

“But it’s exciting and interesting work.” Blackwater’s general construction division is becoming increasingly active in civil construction work. Projects include a new company shop, incorporating a used oil heating system, and an environmentally sophisticated office building in Prince George. It’s all happening by organizing things Blackwater’s way.

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