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Logging and Sawmilling Journal October/November 2011

August/September 2013

On the Cover:
Managing mobile equipment effectively is a key part of an efficient sawmill. B.C.’s S & R Sawmills is finding that investing in new Cat wheel loaders from Caterpillar equipment dealer Finning is paying off in reduced fuel costs. See the October issue of Logging and Sawmilling Journal for a full report on the new wheel loaders at
S & R (Photo of S & R Sawmills millyard by Paul MacDonald).

Home-grown wood pellets for NWT?
The Northwest Territories sees a business opportunity for home-grown wood pellet production with the growing use of wood pellet heating, supported by a strategy to reduce greenhouse gases.

L & M Lumber: a tradition of innovation
A mill upgrade at B.C.’s L & M Lumber—involving a new optimized log breakdown and processing line—positions the independent producer well for recovering lumber markets, and continues a tradition of innovation and improvement.

Tackling tough B.C. roadbuilding
Mark Ponting and his construction crews tackle building logging road in some of the toughest ground in the country, on the B.C. Coast, and they rely on their equipment dealers to help out in minimizing equipment downtime when they are “miles from nowhere”.

Mistik manages growing wood demand
Saskatchewan’s Mistik Management is adapting to the growing timber needs of the NorSask Forest Products mill, which is adding a shift, and is going to require twice as much wood—but it’s a challenge they’re very happy to have.

How does your kiln system stack up?
With mill management always on the lookout to improve their drying operations, it was no surprise that a recent kiln drying seminar in Quebec City drew good attendance, and lively conversations.

OSB on the way up
The market for Oriented Strand Board has improved with the recovery of the U.S. housing market, and Ainsworth Lumber—which is in the process of being purchased by forestry giant Louisiana-Pacific Corp.— is looking at ramping up its OSB operations to meet the increased demand.

Bring on the wood ...
The Miramichi Lumber sawmill in New Brunswick has recently completed an upgrade, including an entirely new small log saw line, and is now raring to go to meet recovering lumber markets.

Turning biomass power on,
diesel off
A wood biomass-fired power system in the works in the small village of Kwadacha, B.C. could be a model for other remote communities looking to wean off costly diesel and propane for power production.

Rolling with the changes
Logger Clint Lightburn is rolling with the changes as forest company Canfor is asking its contractors in southeastern B.C. to move from delivering tree length wood to cut-to-length to its upgraded mill facility at Elko.

The Edge
Included in The Edge, Canada’s leading publication on research in the forest industry, are stories from the Canadian Wood Fibre Centre, Alberta Innovates - Bio Solutions and Alberta Agriculture and Rural Development.

Tech Update – Mill Wide Information Systems
LSJ looks at the technology and systems available to help mill management better manage and operate mills.

The Last Word
Jim Stirling takes a look at the debate surrounding the creation of more area based forest licences in British Columbia.



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The market for Oriented Strand Board has improvedOSB on the way up

The market for Oriented Strand Board has improved with the recovery of the U.S. housing market, and Ainsworth Lumber is looking at ramping up its OSB operations to meet the increased demand.

By Tony Kryzanowski

Like the leaves coming out in spring, Alberta’s oriented strand board (OSB) plants are now coming back to life after a five-year economic winter and a severely down market for the building construction material due to the collapse in the U.S. housing market.

Both Ainsworth Lumber Company and Tolko Industries have either started ramping up production or have plans to turn the lights back on at production facilities that are essentially state-of-the-art plants in both High Level and Slave Lake. Alberta.

Ainsworth also says that an “opportunity exists” to complete the GP2 line at its other OSB plant in Alberta, in Grande Prairie, though it has not indicated a time line as to when this might occur. Completion of this project would make Grande Prairie the largest OSB plant in the world based on volume. Construction of that line was suspended in 2006.

With the recovery in the U.S. housing market, and an increase in OSB prices, Ainsworth is achieving some stunning financial results. Sales in the first quarter of 2013 were $141.8 million compared to $85.1 million in the first quarter of 2012. The $56.7 million increase was mainly due to a 70 per cent increase in OSB pricing. Net income from continuing operations was $36.5 million in the first quarter of 2013 compared to only $0.6 million in the first quarter of 2012.

The market for Oriented Strand Board has improvedLouisiana-Pacific is expanding its share of OSB production substantially with the purchase of Ainsworth Lumber.

First quarter OSB production of 408.1 million square feet (3/8 inch basis) was slightly higher than the previous quarter, and it was one of the best quarters for combined production from the company’s three operating mills, says Ainsworth.

Clearly, things are ramping up at the company’s operations.

“The High Level OSB mill is a top quartile asset, and we are very excited to be bringing it back up to production,” says Bart Bender, Ainsworth’s vice-president of sales.

The Footner Forest Products OSB plant in High Level, which Ainsworth owned in partnership with Grant Forest Products, was mothballed in December 2007. Built in 2000 at a cost of $265 million, it houses the widest continuous flow press in the world and is capable of 860 million square feet of production annually on a 3/8” basis.

As to how fast the OSB plant in High Level ramps up production, Bender says: “It’s important to grow with our customers and not ahead of them. Market demand will dictate how our production ramps up.” He adds that it definitely was “an unprecedented decline in the housing market” that necessitated the closure of the High Level facility.

During the plant’s six-year hiatus, the ownership structure at Footner Forest Products changed. Ainsworth bought out Grant’s 50 per cent stake in the facility for $20 million.

The market for Oriented Strand Board has improvedGrant Forest Products was a casualty of the American housing crash, which resulted in low demand and prices for OSB. The main use for OSB is for sheathing in home building construction. Grant continued to operate its OSB facilities in Englehart and Earlton, Ontario for a short time after the housing crash, but sold those operations to Georgia Pacific in 2010.

Bender says that Ainsworth has been closely monitoring the housing market in the United States, which is headed toward its historical average. Consistent increases in home construction in the U.S. over the past three years have resulted in increased demand and higher prices for OSB.

Chad Eisner, Ainsworth general manager of operations, says that purchasing Grant’s stake in the High Level OSB plant was an important contributor to the facility’s reopening.

“We are excited about opening the mill under full control, and strongly believe it will benefit from having one management team,” he said.

While originally named after nearby Footner Lake, the High Level plant will now simply be known as Ainsworth’s High Level OSB plant. In addition to OSB plants in High Level and Grande Prairie, the company also operates OSB production facilities in 100 Mile House, B.C. and Barwick, Ontario.

Re-opening of the High Level OSB plant will have a significant impact on High Level, a town of about 4,500 residents and one of Alberta’s most northern communities, situated only about 170 kilometres from the Northwest Territories border. While a considerable distance to market, the area contains a large aspen forest resource to supply the OSB facility. The plant will consume about 1.2 million cubic metres of aspen per year. Logging will occur on a seasonal basis when the ground is frozen, as the area where the wood fibre is located contains a lot of muskeg.

The plant will employ 130 employees directly. Eisner says it will have an indirect impact on about four times as many people. The first group of 25 employees started training in April and that is ongoing with an anticipated production start-up this fall.

He says one of the major challenges that the plant has faced in the past was high staff turnover. In addition to forestry, northwestern Alberta has a considerable oil and gas industry presence, which makes the local employment market quite competitive. Ainsworth held a job fair in High Level this past spring and attracted 200 applicants. As with many industries in Alberta, Eisner said that they were still hoping to attract more skilled tradespeople to jobs at the plant. The company also has a definite strategy for overcoming past challenges with high staff turnover.

“We are confident that our current recruitment efforts to hire local people, and build a positive, progressive culture with training and development and continuous improvement at the forefront will make Ainsworth High Level OSB mill a great place to work, making any turnover challenges a thing of the past,” says Eisner.

The market for Oriented Strand Board has improvedAmong the priorities are finding individuals who have made High Level their home or who show a willingness to want to make the community their home over the longer term. It seems to be working, as Eisner says the company’s recruitment program is on schedule and growing.

Ainsworth invested in caring for and maintaining the High Level OSB plant while it was curtailed and is spending an additional $20 million to refurbish and enhance the mill.

“This means new equipment to modernize the mill, creating opportunities for different products,” says Eisner. The mill’s previous focus was on residential sheathing and that line of products will continue to be produced in future. However, Ainsworth says it is also diversifying its product mix at the High Level facility.

“The product mix has evolved alongside our business strategy, which is to diversify our products, customers and markets,” says Bender.

Ainsworth has been investing in product diversification company-wide with 50 percent of its production now described as “value added”.

The company is driving progress and innovation, not looking in the rearview mirror to see what might have worked in the past, says Bender. “We will continue to make value-added products that serve the needs of our North American and overseas customers, and their growth.”

At the time of its construction, the High Level OSB plant represented some of the best and most advanced production equipment available. This included the 12’ wide and 56’ long, Dieffenbacher continuous flow press, which in 2000 was two feet wider than the next largest continuous flow press located in Poland.

Among the advantages of a continuous flow press versus a multi-opening press is speed. When producing 7/16th inch thick OSB panels, the press can manufacture between 650 mm and 680 mm of OSB per second. Another obvious advantage is a lot less stop and start action during the production process.

The High Level OSB plant yard contains two Hendricks portal cranes. One unloads logging trucks while the other feeds the 16’ logs into four conditioning ponds, which measure between 200’ and 300’ long. After conditioning, a Tanguay mobile crane feeds the logs into a CAE Fuji King rotary drum debarker. After gathering on a surge deck, another Tanguay mobile crane feeds the logs through a CAE ring strander, with the wet strands placed in short term storage till they pass through a Buttner single pass dryer. The heat required by the dryer is supplied through burning wood residuals in the GTS wet bark energy system.

After drying, the strands proceed to a cyclone and are dropped through rotary screens provided by Raute Wood, which screens out the fine material. This is material measuring less than 3/16ths of an inch. The larger dry material is then placed in storage and dropped as needed onto a weigh belt.

The market for Oriented Strand Board has improvedBased on the data collected on the weigh belt, the plant is able to calculate how much resin and wax should be added to the wood material once it circulates through a blender. After the blender, the material is placed on a forming line leading to the press that consists of six forming heads. The heads are responsible for orienting the strands. Two provide material for the top surface, two for the core layer, and two for the bottom surface. After a quick check through a metal detector, the material proceeds through the Dieffenbacher press. At this point, a non slip surface is placed on panel used as roofing. What exits the press are master mats measuring 12’ X 24’.

A blow detector inspects the panels for defects and then the panels are stacked three feet high and transported to the Italian-made Giben booksaw area, where they are cut into nine stacks of 4’X8’ panels ready for use.

As the plant ramps up production, Ainsworth says it is working hard to instill a philosophy of ‘continuous improvement’ in all its operations, and the $20 million it is investing in new equipment is part of that mantra.

“The new pieces we have invested in will enable us to continually better our performance across
the board,” says Bender.

Louisiana-Pacific to acquire Ainsworth

In early-September, Louisiana-Pacific Corporation (LP) announced that it would be acquiring Ainsworth Lumber in a deal valued at $1.1 billion (U.S.)

As noted in the attached story, Ainsworth has four OSB manufacturing facilities, in Alberta, British Columbia and Ontario, with a combined annual capacity of 2.5 billion square feet (3/8-inch basis), with the potential to increase capacity to 3.1 billion square feet (3/8-inch basis) with the expansion at Ainsworth’s mill in Grande Prairie, Alberta.

“Ainsworth has very high quality assets and provides us with an expanded suite of strand-based products and technologies, additional access to key international growth markets, particularly in Asia, and enhanced scale and efficiencies in North America,” said Curt Stevens, LP’s CEO.

Stevens noted the APA-The Engineered Wood Association has a consensus projection for U.S. housing starts for the full year 2013 of 957,000, an increase of 23 per cent from 2012. For 2014, the consensus projection is approximately 1.2 million starts. “We believe the acquisition of Ainsworth provides LP with greater flexibility and exposure to this recovery.”