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Big Players Eye I-Joists

By Tony Kryzanowski
Copyright 1996. Contact publisher for permission to use.

Summary: Calgary-based Nascor Inc. reports intense interest in its licensed, turnkey I-Joist manufacturing plants. One reason: no quota access to the US market.

The phone is ringing off the hook in the sales office at Nascor Inc., a Calgary, Alberta company offering a complete I-joist manufacturing package - and instant penetration into the American market - for about $300,000 US. Over the past six months, they have been contacted by nearly every major player in the Canadian lumber and engineered wood market.

The reasons are three-fold. First, I-joists do not fall under softwood lumber quotas recently announced by the United States. Companies pay a 1.5 per-cent duty, and can ship unlimited amounts. Secondly, I-joist usage as a replacement for dimensional lumber in construction has risen from three to 19 per cent in the US in the past eight years. With wood resources for dimensional lumber diminishing, I-joists will inevitably replace them in construction, much the same way that oriented strand board (OSB) is now replacing plywood. Thirdly, a $300,000 US investment represents a drop in the bucket for most larger OSB plants and sawmills, considering the payback.

Northern BC’s Apollo Forest Products has already begun manufacturing I-joists using Nascor’s package. Plus they have earned extra timber rights because of their commitment to manufacture this value-added wood product. Nascor also has a licensed manufacturer in Thunder Bay that sells its I-joists to wholesaler Buchanan Lumber. Ainsworth Lumber Co. is also interested. They have a commitment to build a value-added component to their Grande Prairie, Alberta OSB plant, in exchange for timber rights.

“There has been a lot of interest generated,” says Nascor Joist Licensing Manager, James Lind. “We think that for the next little while, that’s going to be a big portion of our sales. They (sawmillsand OSB plants) already have all the distribution in place, so for them to sell the product is no problem.”

An I-joist is essentially a grooved 2x3 or 2x4 glued into a span of OSB, creating the shape of an I. The most popular widths are 10" and 12", as a replacement for 2x10 and 2x12 dimensional lumber. Lengths vary. Builders can join I-joist beams together, in lengths as long as 36'. I-joist manufacture is still more expensive than dimensional lumber, but the gap is narrowing.

Because I-joists are an engineered product, they tend to be more accurate. The builder is guaranteed a tolerance of 1/16". The price between the two is comparable, considering that as much as eight per cent of dimensional 2x10s and 2x12s can be defective. Nascor’s biggest shareholder is West Fraser Timber Company. They were at one time majority - owned by Macmillan Bloedel before MB partnered with com-petitor Truss Joist Macmillan instead. Nascor sells licenses to manufacture I-joists.

They provide a turnkey I-joist manufacturing plant, complete with software, machinery, approvals from both American and Canadian standards agencies, and marketing support. In return, they collect a royalty of five cents Canadian per lineal foot from each licensed plant. And there are no strings attached. “We don’t tell them that they have to buy their raw mater ials from us,” says Lind.

“Our licensees are allowed to source their own raw materials, labour, and can sell it for wh at ever they want. We don’t set any sales levels or prices on the I-joists.” So far, they have 10 licensees - five in Canada and five in the United States. They see the biggest growth potential in the US, where they hope to license 25 more plants in the next three years. The big stumbling block to I-joists taking over the construction market, however, is lack of an industry standard. While there are now a number of I-joist manu-facturers, there is no established universal standard.

The American Plywood Association (APA) has the support of many smaller I-joist manufacturers to establish an APA standard, much to the chagrin of several larger I-joist manufacturers. Should the APA succeed in establishing an industry standard, the only difference between smaller and larger manufacturers will be price.

“They (APA) want to make it so every-one’s I-joists are identical, so the builder who buys it doesn’t have to go through a library of installation books to find out which one spans what ,” says Lind. “It’s something that’s going to happen.” Right now, building materials suppliers must commit to one company’s I-joist sys-tem.

Down the road, should the APA succeed, suppliers will be able to mix and match, as well as buy from any low-cost manufacturer. Lind says that is what scares bigger I-joist manufacturers. Smaller manufacturers like Nascor and its licensees are by far lower cost manufacturers because of lower overhead. Nascor has done its homework, comparing their package with other commercial I-joist manufacturing equipment.

A popular commercial model will sell for as much as $9 million, says Lind, and produce 250 to 300 lineal feet per minute. The Nascor package will produce 30 to 40 lineal feet per minute, but at a fraction of the cost. “You can put five of our lines in for one tenth the cost of purchasing a full-fledged I-joist machine,” says Lind.

In this day of total mechanization, the backbone of Nascor’s package is still manual labour. It takes six employees to man the six pieces of equipment on their I-joist manufacturing line. Lind says they have investigated mechanized alternatives to manual labour, but have not found a cheaper alternative. Right now, they pay about three cents per lineal foot for labour over-head.

Here is how the Nascor I-joist line works: One worker feeds a grooving machine that cuts grooves to proper depth in either a 2x3 or 2x4. Another worker passes these grooved boards thorugh a glue applicator. Two workers then manually assemble the boards and OSB centre piece, passing it through a press machine that creates the final shape of the I-joist. The I-joist is then mechanically straightened to eliminate any twists, warps or crowns, and is stapled every 3'. Once the glue dries, the final machine on the production line is a cutoff saw, which trims the I-joist to customer specifications. Standards agencies require that I-joist manufacturers test .7 percent of daily production. Therefore, a universal testing machine is also necessary.

In addition to their I-joist production line, Nascor also sells an OSB trimming system that sells for about $175,000 US. All the equipment is custom-built for Nascor under exclusive agreement with a Calgary steel fabricator. The equipment was designed by Nascor engineers and is CSA approved. Lind says I-joist dominance is inevitable because of restrictions on harvesting wood used to manufacture 2x10 and 2x12 dimensional lumber - not to mention new soft-wood lumber quotas.

“You have everything from snowy owls to governments restricting how much you can send down to the US, if you are a Canadian company,” he says. “You can’t cut the big trees or the old-growth forests anymore, so that ’s cutting down wood availability.” Plus there is the issue of lumber quality, as second-growth timber is less dense.

“Eventually, when all of these things really do come to the fore,” he says, “you’ll see dimensional lumber probably drifting away.” Nascor’s long-term plans are to evolve into a research, development and support company for I-joist manufacturers operating under their licenses. They already have plans for an I-joist that will eventually replace a 2x8.

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