FAIRBANKS, Alaska – Operating a sawmill and building materials business has its challenges. Try doing it in Fairbanks in central Alaska.

Ask Jason Knoles, owner of Northland Wood Products. As one of the few independent lumber yards, it’s a tough business to be in. Running a lumber yard in Alaska is quite different from operating one in the lower 48, he noted.

“You definitely have concerns with inventory, long lead times, availability, and a limited season,” explained Knoles, 55. “You’re trying to move a lot of inventory in a short period of time. Where turns are really important down in the lower 48, they’re not as much of a consideration up here. It’s more important to have the inventory and be less concerned about how many turns on the inventory, especially when there could be so many issues along that supply chain.”

Northland Wood Products operates the largest producing sawmill in mainland Alaska. The mill is located on a 70-acre site where the company also operates a retail lumber yard. The business has five buildings for the sawmill, planer, secondary manufacturing, an office, and a shop. Northland Wood Products also operates a retail location in Anchorage, more than 350 miles south, which it added in 2004.

Log is positioned for opening face in Northland Wood Products sawmill.

Northland Wood Products manufactures about 2.7 million board feet a year of white spruce lumber products, but that “could be ramped up to 3 million if there is demand,” said Knoles.

Its niche is grade surfaced lumber, although it also sells rough lumber for use in cabins. The company cuts lumber and timbers – from 1×4 to 12×12 – used in the local construction market. It also cuts industrial material for use in oil drilling and mining operations, such as drill pads or equipment mats, and timbers for log homes. And it manufactures pallets.

Twin brothers Larry and Jerry Flodin founded the business with a portable sawmill in 1965. They had grown up in a family sawmill business in Montana. A fire forced them to move to a new location and rebuild. Larry, a mechanical engineer, designed and built the mill’s machine centers. Larry is now in his late 80s and has been retired; Jerry passed away several years ago.

Northland Wood Products is vertically integrated, which appealed to Knoles when he applied to join the company in 1995; he previously worked in a lumber yard in Medford, Oregon. He began buying into the business in 2000 as part of a ‘golden handcuffs’ agreement.

“Being able to source our own logs and manufacture our own lumber and timbers and retail those to the public just spoke of a lot of opportunity,” Knoles explained. “If you’re a lumber yard down in the lower 48, you’re really limited on your cost and your sell price. You know what a contractor is going to pay, and there are 10 other lumber yards doing the exact same thing, which doesn’t leave a lot of options… When you’re vertically integrated, it opens up a lot more opportunity.”

Early on, his focus was on “low hanging fruit,” finding new efficiencies, reducing costs, and developing new market opportunities. As ownership transferred, he implemented new revenue streams to aid in the transition, such as secondary manufacturing.

Knoles generally buys two or three timber sales a year from the state Department of Forestry and contracts with Logging & Milling, located in Delta Junction, to harvest the timber. Logging usually is done during the winter because roads are frozen, and summer means more fires. Loggers generally try to get out of the woods before April.

The sawmill’s major machine centers consist of a log processor or yard saw for bucking logs to length, headrig with Jacobson Feedworks controls, edger-sorter, trimmer, and green chain. Because the mill does not have a debarker, they use a 40-inch circular head saw for primary breakdown; it is mounted on an overhead carriage system.

A system of string lines, at fixed intervals and grouped by color, helps the sawyer position the log and program it for the cant and boards; the head saw and edger move on an overhead carriage system.

The mill uses logs in a range of diameters and from 33-41 feet long. To determine how to mill a log, a combination of computer software and a decidedly low-tech but efficient approach is used. A series of colored strings spaced apart in 2-inch increments helps the sawyer determine log diameter and where to position the log for the saw and drop-down edger. The strings also help with programming in the boards and cants.

“There’s definitely a human decision-making process when they’re breaking down that log,” acknowledged Knoles.

“This system was pre-laser, and I haven’t seen the need to buy $3,000 lasers to do the same thing,” he added.

The loader puts the log into the dogs, which are attached to a moveable holder controlled by the sawyer. After the saw cuts the opening face and removes any boards, the turners come in and end-clamp the log; the dogs open, the log turns 180 degrees, the dogs close, the turners move out, and the saw cuts the second face. The head rig goes through the same process again twice, turning the log 90 degrees each time.

All boards and edgings go out to the trim station and then the green chain. The cants and timbers drop onto a roll case and go to the timber bin. Lumber products are stacked by hand with stickers between the layers and put on the yard to air-dry.

Ethan Hinz at the sawyer controls. Northland Wood Products manufactures about 2.7 million board feet a year of white spruce lumber products.

The building is heated, so the mill can operate in winter. However, the company does not have a dry kiln. The lumber, stored outdoors, will not begin to air dry until temperatures warm in the spring. It takes about three months for the lumber to air-dry to 16-19 percent moisture content, the level at which the company does surfacing. A Newman Machine planer surfaces the lumber on four sides; the planer is used from June to October.

“We need to make sure that we produce enough lumber in the sawmill to allow sufficient time to dry, so that way we can plane it during those summer months,” explained Knoles. “Generally, we carry a heavier inventory because of the limited times in which we can operate the planer.”

They surface everything from 1×4 to 2×8. The lumber is graded by Western Wood Products out of Portland, which is a “a good program,” said Knoles. Finished lumber is bundled and packaged by hand.

Stephen Maroney jacks a board over to the trim station; slabs and edging continue on the chain until they feed onto a chipper belt.

Northland Forest Products employs an average of 35 people. Six to 10 work in the sawmill and planer operations, and the remainder work in secondary manufacturing or in the lumber yard, helping with customer service, assembling orders, and making deliveries. Two employees staff the retail location in Anchorage. Christian Schmidt is the manager of the sawmill and also fills in as sawyer.

“Some employees have been with the company for decades,” said Knoles. “The longest employee has worked here for 47 years.”

The company’s main customers are building contractors and do-it-yourself homeowners. Best-selling products are lumber, plywood, pressure treated material, and timbers. Knoles embraced differentiating Northland Wood Products from big box home improvement stores by offering products they don’t carry and doing custom work. “It has been important for our businesses to be different than other companies,” he said, adding, “We’ll do custom orders, or we’ll do orders with a much quicker lead time.”

In the future Knoles wants to “build and develop a base of young managers to help innovate and drive the company forward.”

Larry Flodin still comes by to visit occasionally. “Every time he comes out, he comments that he’s happy to see that the sawmill is still running,” said Knoles. “To see the [sawmill] continue going really is satisfying to him.”