Canada's largest furniture manufacturer, Palliser Furniture, has chosen to be vertically integrated big-time, with its own cutting rights, sawmill and particleboard plant.
By John Dietz
Canada's sawmill and particleboard operators could walk into the "back door" of Winnipeg's Palliser Furniture Ltd and feel right at home. While being Canada's largest furniture manufacturer, the company is also a vertically integrated operation with its own sawmill and particleboard plant. Although the particleboard plant is small, it's unique in several ways: it relies on urban wood waste for 75 per cent of its fibre; it uses bark in the mix of fibre; and it just may be the only particleboard plant in North America that is operated by a furniture manufacturer.
Abram DeFehr's basement workshop operation, which began in 1944, has now grown into a furniture giant, but still remains family owned. It has annual revenues of $400 million, more than 4,200 employees and more than three million square feet of manufacturing and showroom facilities in Canada, the United States, Mexico, Germany and Indonesia. Palliser has developed a strong reputation for excellence in the areas of wood and laminated wood products, as well as leather upholstered couches, chairs and motion products. A little more than half of its annual business is in upholstered furniture.
Palliser's biggest supply requirements are in particleboard and hardwood lumber. Vertical integration guarantees a steady, cost-effective supply of each and provides a powerful value-added component. "If I pay $100 for a cord of wood, by the time that cord of wood leaves the province it is worth between $2,000 and $5,000 to the Manitoba economy," says Arvid Loewen, plant manager of the particleboard division.
Initially, pulp logs were used for particleboard. "As we got into it, we said it was a shame to make shavings out of a solid log," he recalls. "That's when we set up this small sawmill, to separate some lumber from the pulpwood and to get the highest value possible out of each log. We value the waste from our sawing process." Palliser's sawmill processes 1,300 cords a month, or about five million board feet a year, 90 per cent poplar and 10 per cent jack pine. The poplar is graded and has several applications. The softer jack pine is used for inner components like slats in mates' beds.
In addition to using its local production, Palliser imports about 10 million board feet of hardwood annually from Wisconsin and Minnesota. It is kiln dried, planed and surfaced at a Palliser mill in southern Wisconsin. The vertical integration of the company extends right into the bush, with Palliser having its own cutting rights. It hires local contractors for all the cutting, slashing and delivery. It also does some quota swapping and some logging on private land. Some highgrade aspen is trucked 700 kilometres south from the Thompson area to the Winnipeg mill.
Leaves and branches stay in the forest, but not the bark. "Some bark always comes off while processing," Loewen says. "We grind it to a uniform size for mulch and deliver it to nurseries." The rest of the bark goes through the sawmill on the logs, drops off in the stream of wood waste after slabs are trimmed and emerges in the particleboard. "We don't debark," Loewen says. "We had a debarker but we found that it was adding to our overall cost. The little bit of bark you see in our particleboard is negligible, because the whole wood waste stream with any bark in it makes up only about 25 per cent of the total fibre required to run our particleboard plant." Logs are pushed through a gang saw and pieces are then sorted.
The 18inch German MoringerSash gang saw holds 12 blades in a single frame. The frame travels as a single unit, ripping logs into 17/16thinch green slabs with bark on. The 40 per cent that isn't useable as lumber goes into an Italian Pesa flaker and made into shavings for particleboard. "Our approach, putting the whole log through a gang saw, is unique in North America although it is done in Europe," Loewen says. "We do it because it's very simple, very straightforward and because we want to be better stewards of our natural resources ." About 75 per cent of the unedged slabs are air-dried. It's slower than drying in a kiln, but there's less waste when slabs reenter the mill for the combination planer ripsaw. "If I buy frame lumber from outside, we lose 15 per cent for reripping into the final width.
We save that by drying with the edges on and then just doing the onestep process ." Palliser uses a 30inch Italianmade Pinaro planerrip saw, with operators hand feeding each slab. Aset of red laser light lines on the table show the precise location for each saw in the machine. The best poplar-furniture grade-is utilized as visible, solid wood fronts and tops. Some palletgrade material is retailed locally. Any remaining fibre, sawdust and shavings are recycled into the particleboard plant. Twentyfive per cent of the particleboard wood fibre requirement is generated from other operations, like the sawmill and imported hardwood, but the majority comes from urban wood waste. Loewen says North America has other particleboard plants that use urban waste wood, but Palliser's plant may be the only one that is dependent on it.
The particleboard division recycles approximately 100 million pounds of wood fibre a year, or 300,000 pounds a day. It arrives daily by truck, as scrap, sawdust, kerf and collector dust. "We take it all," Loewen says. "For us, this is very cost beneficial. We are, basically, receiving our particleboard supply without cost for the fibre. This plant enables some of our divisions and other wood processors in Winnipeg to avoid hundreds of thousands of dollars in landfill disposal fees ." The material is a combination of all the species used in Winnipeg. A high percentage is oak, giving the final particleboard product a unique level of oak content. Other material in the mix includes ash, cedar and even particleboard. "We have adapted our particleboard system to this species mix," Loewen says. "We are so consistently inconsistent in the species that it doesn't matter, our recipe doesn't change much. That is very unique ."
Palliser had to devise a two stage method to automate the grinding of solid wood waste that varies in size and shape. A loader shuttles day and night between the stockpiled scrap wood and a conveyor belt that feeds scrap into a 150HP American Pulverizer hammer hog. The broken down hog material goes on to a PZ 14ring flaker and emerges at a uniform size, between shavings and sawdust, that is ready for feeding into the particleboard system. Four Leidig silos store the final mix of all the species. "By metering out all four silos at the same time, we ensure a well mixed and consistent recipe," Loewen says. The resin and heat recipe never changes. Finer material from two silos is metered for surface material in the final particleboard; coarser material is metered into the centre of the particleboard.
Palliser does have the option of using virgin wood for particleboard, if the waste wood supply should ever run short. However, Loewen says, the supplydemand balance has been close to perfect for the past five years. "We have not bought any particleboard from the outside for five years, and we haven't sold any outside, either. Our demand varies somewhat seasonally, but we accommodate it by carrying some inventory ." Winnipeg's supply of waste wood has been adequate but not overwhelming.
Total production has been increasing at a rate that keeps up with total supply. In November 2000, for the first time in a decade, Loewen says, the flourishing local economy was producing more wood waste than Palliser could accept. It wasn't a problem for the furniture manufacturer, but it could present an opportunity. "It's because the economy is pretty strong and there's a lot of activity," Loewen says.
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