Little John Enterprises has to be very resourceful at sourcing timber for its specialty mill operation in northern Ontario.
By Paul MacDonald
Judging by the calamities that have hit Little John Enterprises in the last few years, it's a good thing that John Kapel and John Kapel Jr. are resilient-and resourceful-sawmillers. In the spring of 1996, the area around the small specialty sawmill in Timmins, Ontario was hit by a flood. "We were landlocked in here for two weeks," says John. "We had to use a boat to get our people in. Every morning a boat left at 6 am to bring our employees in." The mill is on a site adjacent to the Mattagami River. This past summer, the mill was hit by a severe storm. John Jr. likened it to a mini twister, though. "That's no regular storm when it's tearing part of the roof off the mill and grabbing two-by-fours and airmailing them all over the yard." These weather related events followed a major fire at the operation several years back, which destroyed most of their equipment. John Jr. jokes that considering their track record, they were considering getting earthquake insurance, even though the likelihood of northern Ontario being hit by an earthquake are right up there with the chances of winning the Lotto. Through all of this, the father and son team has rolled with the punches, rebuilding and surviving.
Today, their operation produces about two million board feet of specialty product a year, much of it for the mining industry in northern Ontario. John Kapel's first involvement with the forest industry was actually on the growing side, rather than the processing side. In 1979, he received a contract from Ontario's Ministry of Natural Resources to supervise the planting of 200,000 jack pine seedlings in the Kamiskotia area. He saw the amount of timber that was being wasted in road construction, a common practice at the time, and decided to set up shop with a portable sawmill operation to mill this timber. "We couldn't understand it," he recalls. "Here we were planting these seedlings for future forests and at the same time these trees were being knocked over and not being used for anything. "At that time, if they wanted to make a road, they would just bulldoze the wood over. We figured the wood was being left there and it should be used. So we went and got a skidder and started hauling it out." This kind of entrepreneurial initiative-essentially involving nonapproved use of Crown timber- earned John a visit from the Ministry of Natural Resources (MNR).
The ongoing challenge for Little John Enterprises today, and a serious one at that, is that of sourcing wood, however. Much of the timber in the area is committed to the major forest companies operating in this part of Ontario, such as Domtar and Tembec. Both John and John Jr. recite the problems they have had of getting a relatively small amount of wood in an area that is pretty well dominated by the large volume sawmills of the major companies. "We've tried for years to get our own wood." John Jr. says they have talked to MNR about getting their own quota "until we're blue in the face", but with no success to date, even though they are only looking for 20,000 cubic metres a year to run their operation. They work with the major forest companies with mills in the Timmins area, taking oversized wood-most of it in the 30 to 36 inch diameter range-that is too big for the high volume, dimension lumber operations. But the two men are pure entrepreneurs and report that it can sometimes be frustrating dealing with the big companies. "When they are using spruce and jackpine, and you come up with an idea for using cedar and birch, you can get it, but they still control the resource. We don't." With no timberlands of its own, Little John Enterprises faces some high costs when purchasing wood. In the case of a timber sale, one of the major companies is able to make a higher bid, and then balance out the higher wood cost with the lower cost wood on its licence.
Little John does not have that luxury. "We're paying the full shot and can't offset the cost against anything," says John Jr. John argues that smaller operators can do a better job of creating jobs than larger mill operations. "If we get 15,000 cubic metres of wood, we can employ 15 people for a year. Some of the large mills may run through 700,000 cubic metres a wood a year and may only employ 50 people." Even though it is a "scramble" to get wood, Little John Enterprises does seem to manage to get a variety of wood for its operations. At any point in time, they may be cutting spruce, which is the main species they work with, but it might also be jack pine, cedar, poplar or aspen. "You name it, we cut it," says John Jr. Recently, they started running tamarack and birch to produce tongue and groove flooring. Tree size is not an issue to them. "Every single tree that is harvested out there, if we can get our hands on the timber, regardless of the size, we'll be able to produce something from it and find a home for that product. "I don't care what kind of a piece of wood we get, we can make money off it," says John confidently. With the downturn in the mining industry, the company has had to find new products and new homes for those products in the last several years. The mining industry in northern Ontario has been a mainstay of their business right from the start, and the industry is still a major customer. They supply 8x8 spruce timber for the industry, required for the "staging" - the platforms that the big mining drills operate from, sometimes as deep as 7,000 feet under the hard rock of northern Ontario. These timbers are also used for decking in the mines. They also supply a good deal of 3x8 pieces for other mine uses, such as ties for the underground rail lines.
They can produce timbers up to 24 feet long and 40 inches in diameter. "We can turn the product out big and long," says John. Little John does a fair amount of general carpentry work for the mines, as well, since this function has been contracted out in recent years. Due to low gold prices, the mining industry is in the doldrums, however, and the company is looking at other market areas where they can put their specialty skills to work. Playing off their expertise in supplying the mining industry, they recently received an order for 5x10 timbers for one of the railroads. They have already developed a reputation for meeting the needs of special projects. "We get calls all the time about supplying specialty products," says John. "We're one of the few operations that can do this kind of work." This kind of low volume, specialty work fits poorly, if at all, with the high production mills. "One of a kind" projects might include turning out bridge components or timbers for a private cottage. "It's high value work and it all generates revenue," notes John Jr. They are also exploring the market for landscaping materials and have a busy pallet operation, which utilizes lower grades of lumber. And all of this work, with its relatively high labour content, is added value. "We've been producing added value wood products for 17 years, long before the government people started yapping about added value," says John Jr. "Adding value to us is taking that tree and properly utilizing it, maximizing its value. It's as simple as that.
It's not a situation like at a big production mill, where its 'two by six day' and all they produce is two by sixes regardless of what logs come in. It means looking at a log when it comes in and seeing that you can get an eight by eight there for a timber or for producing material for two or three pallets, with slabs on the outside that can be trimmed for the resaw." A Baker resaw, in fact, is the most recent equipment addition to Little John Enterprises, and is used to do pallet stock and also helps in broadening and diversifying their product line. As a result of the fire four years ago, they had to move quickly to get equipment in place. Faced with the prospect of waiting months for delivery-not to mention the high cost-of new equipment, they opted to go used and picked up equipment from a shuttered mill near Sudbury. "The key to us was that we were up and operating within 90 days of the fire. We didn't lose one customer," says John Jr. "And our employees never lost a day's work." They have a Morbark 640 rosserhead debarker, which is modified to handle wood down to five inches, a 56inch circular saw on a TS Manufacturing carriage, along with a double arbour edger that has been modified to produce eight inch pieces. "We were doing eight inch on the carriage before, but we lifted the top arbour another two inches, added another 100 horsepower and we were able to double our production of eight inch material," explains John Jr. The mill has a 48-inch Hansell chipper, which along with the debarker were the only pieces of equipment that weren't destroyed in the fire.
They are planning on building a new mill, though, possibly as soon as in a year's time. The exact timing will be dependent on markets, however. Even though they are after timber almost constantly, being a small operator they also have to be conscious of having too much inventory out in the yard. This past summer they had about 1,700 cubic metres, but they have had as much as 8,000 cubic metres at times. Out in the yard, the equipment includes Cat 950B and 950E loaders, a Cat EL200 excavator with Serco grapple and portable CTR slasher attachment. A Cat V40 propane forklift is used in the pallet shop. The mill has its own truck/trailer operation, a 1991 Peterbilt unit with a Cat 425 engine, a logging trailer with a Serco 8000 grapple and a Temisko chip van. Rounding out the equipment picture is a 1990 International five-ton flat bed. Both John and John Jr. express concern about where future timber is going to come from, not just for Little John Enterprises, but for the industry as a whole. Government and the industry have to pay more attention to the management of the forest resource and utilization of fibre in northern Ontario, says John. Harvesting has been going on in this area for more than 70 years and there is still a feeling among some people in the area that the forests are inexhaustible. But of course that's not the case, says John. "The more we utilize the forests wisely now, the longer they will be there." A big consideration is that outside the mining that goes on around Timmins-an industry that is currently on the wane- forestry is the only game in town. "We can't afford to lose forest industry jobs," notes John. "It's not like we're in Toronto or Vancouver, where we can go down the street and get a job at a plastics factory or pipe factory. This is it."
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