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Ramping up logging on the Island
B.C.’s John Murgatroyd and John Prachnau have quickly ramped up logging operations on Vancouver Island in the last few years, through their companies Coast Forest Industries and Antler Creek Logging, utilizing a variety of logging equipment along the way.
By Paul MacDonald
It’s been a fast-paced ride for logging contractor partners John Murgatroyd and John Prachnau over the last five years.
In 2007, the two fallers were running a medium-sized contract falling operation on northern Vancouver Island. Fast forward to 2012, and the two young business partners have one of the largest contract logging operations on Vancouver Island, through their companies, Antler Creek Logging and Coast Forest Industries.
Antler Creek Logging will do around 100,000 cubic metres of full phase logging and 500,000 cubic metres of falling this year, and Coast Forest Industries will fall and process around 800,000 cubic meters.
And along with that growth over the last five years has come a lot more logging equipment.
Their first business acquisition was GLM Falling of Port McNeill, on northern Vancouver Island. With that came four machines—a John Deere 959J feller buncher, a John Deere 330LC feller processor, a Hitachi 450 roadside processor and a Kobelco SK400 roadside processor.
Shortly after that, they bought a TK 1162 machine.
“The demand kept growing and we had to double shift one of the bunchers, so we bought another buncher, a Deere 959J, and then a year later we bought the new 959K model ” explains Murgatroyd. They also bought another a new Hitachi 350 with the new Waratah H624C head.
“We had all that going, and then one year later, we were in talks with Dwight Giesbrecht of Antler Creek Logging, down Vancouver Island, in Port Alberni.
“It happened pretty quick. Dwight was looking to sell, and he figured we were the right guys to buy the operation. I had some good past history with him—I had worked with him quite a bit in the past, doing hand falling. We worked out a deal pretty quickly, and within a month, we had acquired Antler Creek Logging.” With Antler Creek, came additional harvesting equipment, in the form of five 2250B Madill machines.
“Dwight ran an incredibly good maintenance program, and all the machines ran fantastic,” says Prachnau. “He had a great service and maintenance program on the Madills, and we started thinking that was the machine that we wanted to move towards. But it’s been so hard to find used Madills—no one wants to give them up.”
After ceasing operations in 2008, Madill was purchased by sawmill equipment manufacturer Nicholson Machinery, and started operating again in 2011.
They’ve thought about buying new Madill equipment—they have bought some new equipment from time to time—but picking up used equipment, along with the equipment they’ve inherited from the acquisitions, has worked out very well for them, so far.
Within a year of buying Antler Creek, they bid on some full phase logging work down Island, and were successful, so they bought two Cat 330 log loaders, and two processors, a Volvo EC210 and a PC200 Komatsu, both with 622 Waratah heads and they bought another 1162TK off owner/operator Scott Krieger, who came to work for them.
They also picked up a John Deere 748G grapple skidder.
“So we sort of have a mixed bag of equipment,” says Murgatroyd. “We haven’t been able to stick to one brand because they are not out there right now. We searched around the Internet and around the market for the best pieces of used equipment we could find. But it’s hard to find what you want out there. So we’ve been looking for what we think fits us the best.”
During the depths of the industry downturn, there was lots of used equipment, going for a song. But with the recovery, that’s changed.
“In the first two years we were running the business, a guy could have his pick of almost anything in equipment. It was as flat as the industry had been in quite a while and machinery was selling really cheap,” says Prachnau.
“And then things started turning around in 2009, things looked good in 2010, and then it took off in 2011 and equipment just dried up. Nobody was selling—or if they were, they were asking top dollar.
“There is such a demand out there now, and our timelines have been tight,” added Murgatroyd. “We’ve had maybe a month to find two pieces of equipment and starting hauling wood. We were awarded the full phase contract down Island the second week of November and they wanted 3500 cubic metres in the water by the end of November. So we had a quick turnaround to get equipment in place.”
Their most recent purchases were a Cat 732TK and a Cat 320C processor with a 622 Waratah head, both out of the B.C. Interior. “We have developed a good relationship with Joe Hill of Hill Equipment and have had good success with purchases though him,” adds Prachnau.
Though they have a healthy equipment line-up, sometimes it makes sense to use the services of other contractors. Ryder Contracting does some processing and hoe chucking work for them down Island when they need some help.
“If there is 5,000 or 10,000 cubic metres, we’re not going to run out and buy a piece of equipment for that,” says Prachnau. “If something needs to be done quickly, we can bring in some extra guys. And it works the other way around, too. People use us if they need some volume processed or bunched. We think we have a good relationship with the other contractors out there—we use them and they use us.”
Not everyone would have chosen to get more involved in the forest industry at the bottom point of the cycle in 2007, as did Murgatroyd and Prachnau. But the two partners said they did not think twice about seizing the opportunity. “A lot of our friends and people in the industry thought it was a bit risky,” says Murgatroyd. “But like everything else, there is never really an optimal time to buy. It’s there and it’s offered, and you either take it or you don’t.
“We both had some history with Mike Gordick, who was the owner of GLM Falling, and he came to us, and he was very fair. This was the time that he wanted out, and you couldn’t really ask him to wait another year. It was either pass on it, or do it. Both Mike and Dwight Giesbrecht were easy to deal with when it came to putting the deals together.
“You know, you can’t always choose your time,” adds Murgatroyd. “The way we looked at it, it was a slow time. But if things were booming, we probably wouldn’t have had the chance to buy it. We really never considered not buying—the opportunity was there and we jumped on it.”
It’s a good thing that both Murgatroyd and Prachnau are high energy guys, and are eager to take on what the business brings—which can be something different every day.
“I love getting up in the morning and not knowing what might come up during the day—that’s what makes it interesting,” says Murgatroyd. “I could not work in a mill or an office where I was going to the same spot, day in, day out. I like it when there is all sorts of change going on.”
And it’s a good thing they like challenges. As their business has grown, they’ve gone from being fallers themselves, and managers of a falling business, to being managers of a large full-scale logging operation with a fair number of people—and a lot of iron.
“It’s been a big learning curve for us,” says Prachnau. “It’s almost like you don’t choose—you’re pushed into certain roles. We’ve hired supervisors, and we’re lucky we’ve got great people. It makes our life a lot easier.”
But the assortment of equipment does pose challenges at times, they say.
“What Antler Creek had going in Port Alberni with the all Madill equipment, ideally that would have been the way to go. But when you’re growing as quickly as we have been, that would have been impossible. If we wanted to keep that going, we never would have been able to grow. It was either grow with some other brands or equipment, or don’t grow.”
Murgatroyd says they have two great heavy duty mechanics, Dan Cochrane in Port McNeill and Ryan Giesbrecht in Port Alberni, to help deal with the variety of equipment. They have shops in both Port McNeill and Port Alberni where the big repairs are done on the equipment.
As mentioned, they move equipment around a bit, but they pretty much try to keep the equipment either up island or down island. “We do a little bit back and forth, but we try to keep them in one place or the other. If it’s a small piece of work, it’s probably cheaper to subcontract it out rather than low-bed a machine down for a couple of weeks’ work. We brought one of the bunchers up to the North Island, but it stayed for six months.”
And as always, it’s key who you put in the operator’s seat of those machines. It’s been tough for the industry as it recovers, as there has been a migration of operators to the Alberta oil patch throughout the downturn.
“You can go through quite a few operators to settle on the crew that you want, especially when you need to get things going quickly,” says Murgatroyd. “We’ve had quite a few guys who came from the B.C. Interior, but it’s always tough to get a guy to relocate permanently down here. But we have good operators now.”
They’ve also done some training of their own. “We trained one guy who was a hand faller, and he is now doing really well on the buncher.”
Processor operators have to be on their game, dealing with several different sorts each with a variety of lengths many destined for the export markets.
Conditions can vary for the up-Island and down-Island logging operations. Down-Island tends to be more of a rocky fir-type of ground, and up-Island tends to be bigger wood, and the ground is softer. “The logging up island is quite a bit harder on the equipment,” says Prachnau. “We’re working with large hemlock so you have heavier, taller wood and softer ground to work in. It can be very challenging maneuvering a large machine in soft ground.”
While the business decisions by Murgatroyd and Prachnau have been well thought out, they say that sometimes they have to make decisions on the fly. As for a five year business plan, well, that’s just not possible right now.
“The way logging is going, it can be hard to predict,” says Murgatroyd. “Our original business plan was to take over GLM, maybe add to it, and work a bit with the local contractors.
“But as the opportunities have presented themselves, we’ve looked at them, and if they’ve looked good, we’ve expanded. There was no plan to go down Island, but the opportunity was there, so we took it.
“The way the industry is going, it’s next to impossible to have a long term plan on where you are going to be. Basically, you follow where the industry is going.”
Murgatroyd noted that while this past downturn was deep, there have always been ups and downs in the industry. “This downturn was long but people forget that in 1999, Western Forest Products shut down for an entire year. You don’t get much worse than that.
“From the day that John and I started, it was doom and gloom in logging. But you hit some highs, and you hit some lows. That’s just the industry and the cycle is going to be around long past us. My faith in the industry is always going to
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