San Group Keeping Busy with Acquisitions, Upgrades

by | May 1, 2023 | 2023, Industry News, Logging & Sawmilling Journal, May/June, Sawmill

The San Group’s motto says it all, in terms of value-added wood remanufacturing, says Kamal Sanghera, the San Group’s CEO.

The motto? From Harvest to Home.

The company uses the timber harvested in B.C. forests and manufactures added-value products that will see the end product going to the home.

San GroupThe pieces to do that are all there, at the company. The San Group’s vertically and horizontally integrated business units include harvesting, primary manufacturing, remanufacturing, value-added manufacturing, retail sales and global distribution. Their end goal: maximize the utilization of each log harvested. In short, it’s all about recovery—and doing manufacturing in Canada.

“We want to create manufacturing and value-added jobs right here, in B.C.,” says Sanghera.

Despite the current industry downturn—following the lumber market going on a tear through the pandemic—they are continuing to pursue that strategy, with acquisitions and equipment upgrades.

San GroupThe last year has been especially busy for the Langley, B.C.-based San Group, with the company working on completing a new small log line, adding to its reman operations, and purchasing the Acorn sawmill on the B.C. Coast from one of North America’s largest lumber producers, Interfor.

In a year when the B.C. forest industry has been marked by permanent sawmill closures, Sanghera notes that the company is working hard to make investments—and create jobs—in the province.

The purchase of the Acorn operation is part of that strategy, says Sanghera, and the company now plans a number of upgrades at the facility, located in Delta, a suburb of Vancouver.

The acquisition builds on San Group’s fully integrated value-added wood products processing methodology and positions the company’s Innovative Lumber Manufacturing Systems (ILMS) with the mill’s production capabilities.

“The Acorn mill is a good fit because we need shorter lengths for our reman facilities in Langley and Port Alberni, and Acorn is perfect for that,” said Sanghera.

“Acorn is a very good mill, but it needs more investment to make it even better,” Sanghera added. The acquisition will integrate Acorn’s production into San Group’s value-added manufacturing model which uses downstream processes to create wood products ready for distribution, he says.

San Group

The still-to-come expansion at San Group’s newly acquired Acorn sawmill will focus on installing a new auto grader and dry kilns to modernize the sawmill’s efficiency.

The acquisition also expands San Group’s business by increasing its global customer base and providing access to new regions. San will inherit the Acorn mill’s long-standing position as a specialty wood products provider for the Japanese market. San Group manufactures and exports Canadian-made wood products to over 27 countries

It is emerging as an even larger player in the B.C. forest industry.

Following the Acorn acquisition, San Group’s production capacity now exceeds 500 million board feet, making it the second largest sawmilling company on the B.C. Coast—and one of the largest privately held forestry companies in Western Canada.

“Acorn’s complementary sawmilling technology, customer base, and geographic footprint make it an excellent fit with our value-added business model, and the transaction strengthens our global wood products export base,” said Sanghera. “The acquisition is also consistent with our go-forward strategy to diversify and accelerate investment in high-growth areas.”

Added Suki Sanghera, San Group’s, Co-Owner, and Kamal’s brother: “We have invested a great deal into the B.C. forestry sector, including the construction of a new mill and world leading 300,000 sq. ft. value-added plant in Port Alberni, and Acorn will seamlessly integrate within our ecosystem creating at scale one of Canada’s most efficient and largest value-added wood products companies.”

San Group

In the last year, the San Group purchased the Acorn sawmill from forest company, Interfor. The Acorn mill is located on a 30-acre leased site on the Fraser River in Delta, B.C., a suburb of Vancouver.

As it has in the past, the San Group continues to take a different path from the major forest companies in B.C.—who have a focus on commodity products—with its focus on value added products. “The San product is more of a finished product and that is where we have been investing a lot of our capital for the last four or five years,” says Kamal. And going forward, for the next several years, too.

The San Group’s value-added expansion includes installing an Anthon line, a fully automated system designed to develop edge glued panels extending to eight feet, in Port Alberni. The Anthon line’s advanced manufacturing process will not only help improve San Group’s product portfolio, but also increase the company’s push to create downstream high value products for global export.

The company’s approach is to, as much as possible, manufacture wood products that customers are looking for, rather than manufacturing wood products, and then finding a market for them. It may seem like a subtle difference, but it’s significant in that it helps the company get away from commodity wood products. For example, over 50 per cent of their production is pre-sold.

And there is, again, a strong focus on recovery.

“Kamal and Suki have been involved in the reman business for 40 years, where supply of raw materials was always difficult,” said Bob Bortolin, vice-president of business development at the San Group. “What that means is they have to be creative, and take bits and pieces and turn them into wood products. These two guys know markets.”

Along with that comes a strong entrepreneurial drive. That same drive may have existed with the large major forest companies at some point, but as they have grown, decisions take longer to make.

“The majors can’t move the way we move—we make decisions quickly, and can make changes quickly,” says Kamal.

And that includes making decisions on equipment purchases, new and new-to-San.

San picked up the Anthon equipment for Port Alberni from an equipment auction at the now shut down Greenwood Forest Products mill in Penticton, B.C. The German-based Anthon equipment’s North American dealer is North Carolina-based European Woodworking Machinery Co.

The still-to-come Acorn Forest Products expansion will focus on installing a new auto grader and dry kilns to modernize the sawmill’s efficiency.

San GroupAfter purchasing the mill, San Group’s leadership team identified these projects to help enhance the mill’s output capacity while reducing waste. They are also looking at moving from the fixed edger now in place at the mill, to a shifting edger to achieve better recovery. “We want to get more recovery in one pass, and not waste going back and forth with the wood,” says Sanghera.

Explained John Langstroth, San Group’s Senior Vice President: “We are highly integrated and these advancements allow us to add efficiencies and realize economies of scale. The two projects create further synergistic effects on sales integration, allowing us to expand our product base. Additionally, we will need to focus on hiring more skilled workers to handle the increased capacity.”

Sanghera says that due to the drop in lumber markets, they are pacing some of the changes to mill operations, with a focus on projects that will deliver quicker returns on investments. They have also carried out some improvements to the back end of the Acorn mill, to better handle residual materials. He noted they will also be working on improving the scanning equipment at the mill. “We are working with the designers and the equipment companies to help us make the right decisions on what to install.”

They also may be tapping into funding the provincial government has made available for value added operations.

In January, the B.C. Government announced it will invest as much as $90 million over three years through the new BC Manufacturing Jobs Fund. The fund will support high-value industrial and manufacturing projects to drive clean and inclusive growth in rural, remote and Indigenous communities.

The upgrades will be building on an existing base of high tech equipment already in place at the company’s operations, including:

  • At the centre of the San Group’s small log operation in Port Alberni is a refurbished and upgraded HewSaw R200 A.1 single pass sawing machine, which provides added benefits, such as improved recovery and a substantial increase in throughput compared to traditional sawmilling techniques. The equipment is designed to process small logs, from 3” to 14” in diameter.

    The R200 A.1 at San Group was originally at Northlands Forest Products in Fort McMurray, Alberta. Northlands purchased the machine new in 1996 and then sold it to San Group when they purchased a brand new HewSaw, which was installed in 2017. The older machine was shipped to HewSaw’s Abbotsford, B.C. workshop where it was stripped down, the frame was checked and re-painted, and then the machine was rebuilt before being sent to San Group’s Port Alberni site where it was installed in 2020.

    The R200 A. 1 is one of HewSaw’s highly productive single pass machines. Logs 8 to 20 ft in length are scanned on a HewSaw v-flight scanning conveyor and then positioned for the primary breakdown process based on the scan information with a HewSaw rotary log positioner. The logs are then chipped on all four sides prior to the resulting cant being further processed by a vertical double arbour ripsaw (horizontal saws). Following the ripsaw, the lumber heads downstream for further processing.

    HewSaw has been manufacturing sawing machines and lines in Finland for almost 60 years and has delivered more than 400 lines worldwide including over 70 installations in North America. The company offers a full range of products that can process logs from 3 inches to over 22 inches in diameter and in most cases they handle the edging process, eliminating the need for downstream edging equipment.

  • Also at Port Alberni, wood is run through a MiCROTEC Goldeneye 502 scanner, which features next-generation X-ray technology sensors and state-of-the-art cameras and components. The scanner allows the San Group mill to recognize wood defects reliably and accurately in order to automate, streamline and optimize its production.

Among the equipment suppliers for the Port Alberni project was MPM Engineering, which supplied sawmill optimization software. Arrow Speed Controls provided Variable Frequency Drives for the project.

At the front end, the mill has a custom-built merchandizer that was built by the San Group on site, and a VK Brunette, MK V-17 G debarker. Towards the back, the mill has a Newnes 60 bin sorter that came out of the Tolko operation in Williams Lake, B.C., and an Acme lumber packaging unit. The remanufacturing operation has six dry kilns, two specialty Porta Kilns from Innovated Control Systems, and four larger Track Loaded Kilns from Brunner Hildebrand. The Brunner Hildebrand dry kilns each have a holding capacity of 100,000 board feet, and are equipped with the state-of-the-art B-Vector control system.

Unlike most mill operations on the B.C. coast, the new Port Alberni sawmill is specifically set up to handle smaller, second growth timber. The mill is designed to produce 120 million board feet a year, from logs as small as three-inches in diameter.

But setting all this equipment up—and building the first sawmill to be built on the B.C. coast in 15 years—came with special challenges. They built all this in the midst of the COVID-19 pandemic.

But San CEO Kamal Sanghera seems to welcome a challenge.

Going forward, San expects one of the major challenges for the company—like the rest of the industry—will lie in getting workers. “Shortage of people is a problem, but we’re hiring more every day,” says Sanghera. They have a regular presence at job fairs where they operate.

They are also working with local First Nations groups around Port Alberni, and now have about 25 First Nations employees.

And they are focusing on training their employees, in areas from grading to technology, for a value-added human approach.

As for future acquisitions, Kamal said there is still more growth to come. “Stay tuned,” he offered.

The acquisition of the Acorn sawmill from forest company Interfor has a bit of a deja-vu feeling for the San Group.

One of the San Group’s first major deals in the lumber industry was with Interfor CEO Lawrence Sauder in the early 1990’s, to acquire a remanufacturing plant in B.C.

“We are humbled to now have the opportunity to purchase Acorn, one of the premier sawmilling facilities on the B.C. Coast,” says Kamal Sanghera, the San Group’s CEO. “We will strive to live up to the Sauder Family’s name and their contribution to the B.C. forest industry by emulating Lawrence Sauder’s entrepreneurial spirit.”

Founded by the Sauder Family and now with annual revenue of more than $4.5 billion, Interfor had humble beginnings. It started life as a single sawmill in Whonnock, in B.C.’s Fraser Valley, and is now one of the largest lumber producers in North America, with production capacity of over five billion board feet.

The Acorn mill is located on a 30-acre leased site on the Fraser River in Delta, B.C. It was built in 1963 and was acquired by Interfor in 2001 from Primex Forest Products.

The mill specializes in producing lumber squares for the traditional Japanese home market and most of the production is exported to Asia. It has a two-shift rated capacity of approximately 140 million board feet per year, but has been operating on a one-shift basis for many years. Acorn produced 56 million board feet
of lumber in 2021.

Paul MacDonald



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