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Logging and Sawmilling Journal October/November 2011

February/March 2012

On the Cover:

From the filing room to the sawmill floor, forest companies are now investing capital dollars to maintain their cutting edge in production and efficiency. Read about how Canfor tackled a major upgrade at the company’s Polar sawmill in this issue (Photo courtesy of Del-Tech Manufacturing Inc.)

Spotlight

A recent resource conference in B.C. highlighted the huge growth the forest industry has seen in lumber exports to China—and that there is still more growth to come.

Tigercats taming steep slopes

B.C. logging contractor Mike Closs has recently made investments in some new equipment, including a Tigercat 635D six-wheel skidder and a new Tigercat L870C leveling buncher, both of which are now ably taking on steep slopes in the B.C. Interior.

Debarker in the bush

B.C.’s Timber Baron Contracting has carved itself a market niche selling timber to Asian customers, and to meet Asian health standards they have developed and designed their own portable debarker to peel the logs in the bush.

Learning from experience

Canfor’s Polar sawmill in B.C. learned from the experience of a sister mill in planning its own upgrade, and opted to do the $20 million project in two phases, to assist in the start-up curve.

From paper to wood pellets

A new $19 million wood pellet facility has opened at the site of a former Smurfit-Stone paper mill in Quebec. Trebio Inc. has achieved the ENPlusA1 standard for its wood pellets and is looking to serve domestic and European markets.

Bringing biomass to the Beast

Transporting their Bandit 2680 Hybrid Beast Recycler to the biomass—rather than bringing the biomass to the recycler—is paying off for Ontario logging contractor Don Tucker.

Fink’s Sawmill carries on logging —minus the mill

The sawmill in Fink’s Sawmill is long gone, but the company continues on as a logging contractor in the B.C. Interior, tackling beetle-infected lodgepole pine in the Bulkley River drainage.

Turning the wood residue power switch on

Using European technology, B.C.’s Nechako Lumber will soon have a new plant to capture surplus heat created through the utilization of wood residue, and convert it to electrical power.

The right exit strategy for you and your business

Logging glory days relived on Vancouver Island

The Edge

Included in The Edge, Canada’s leading publication on research in the forest industry, are stories on Canadian Wood Fibre Centre /Natural Resources Canada and Alberta Innovates - Bio Solutions research projects.

The Last Word

Tony Kryzanowski says the Burns Lake sawmill tragedy is a safety wake-up call for the forest industry.

Tech Update

Supplier Newsline

 

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Fink's SawmillThe right exit strategy for you and your business

By Dave Urness

As the owner of a successful forest industry business, you know just how hard you’ve worked to make your business succeed. You know that it’s not enough to know where your business is at today. You need to have a plan for the future—to achieve the goals of your business as well as your personal goals.

Like a lot of industries, the forest industry today has an older labour force. You may already be thinking about selling or passing on your business; or perhaps that is something that still seems far down the line. But having the right succession plan isn’t just about when or how to sell something. It is an investment in your business. You will always have the business ready for sale so you can step back if and when it’s appropriate. With recent economic difficulties and labour shortages, many business owners felt the pressure to sell whether their business was in prime condition or not. An exit strategy means that when you do sell your business, it will be on your terms.

A proper exit strategy also has immediate benefits. It will make your business more profitable, more efficient and easier to run today, tomorrow and every day until you choose to move on.

What is an exit strategy?

An exit strategy is a comprehensive road map to successfully exit a privately owned business. It will allow you to maximize the value of your business, minimize taxes and help you reach both your financial and personal goals.

It’s important to take a balanced strategic approach in every aspect of running your business. This will allow your company to align its business activities to the overall vision you have for your company. When working with a succession expert, they will walk you through a program that includes taking stock of where your company is at today, where the business needs to be and what needs to be done to fill the gaps.

Change your perspective

One of the best ways to examine your business is to think like a buyer. What would you be looking for? A good answer might be summed up like this: A strong company with a solid customer base, a good team in place that operates effectively and efficiently, and is well financed.

People

A strong management team is a key driver of value. In the forest industry, like in many industries, people are your most important asset. Too often, the business owner has all the business contacts and is the one overseeing all areas of the business all the time. As a result, when that person leaves, all the company’s goodwill leaves with them. The more valuable you are to your business, the less value your business has.

Operations

Too many forest industry businesses rely on the knowledge and experience of owners, to run effectively. Established and well-documented processes and procedures are another fundamental driver of value. As well as improving day-to-day operations, this will show a potential buyer that efficient practices are already in place.

Customers

It is not always good enough that a business has customers. They need to be good customers, the kind that will stay with a business even after its ownership changes hands. A diversified client or customer base increases the value of your business in any kind of succession scenario. It is one of the major markers of the health and future prospects of your business.

Finance

There is really no downside to ensuring that your financial practices are current and well-documented. It will help you make better decisions for your business now and be a measure of value for a future potential buyer. You should have accurate financial records that can be readily accessed, up-to-date tax filings, budgets and variance analysis, and a good working relationship with your bank.

Many businesses in the forest industry have been in the same hands and run by the same people for decades. Now is the time to start thinking not just about tomorrow, but about five, 10, 15 or even 20 years down the road. You have spent your life building business value. Don’t wait until it’s too late to protect it.

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To find out more about ExitSMART, MNP’s succession planning program, contact Dave Urness, CA, Alberta Forestry Practice Leader at 1.888.831.2870 or dave.urness@mnp.ca.

 

 

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