the site of an abandoned chip mill in Miramichi, Eagle Forest Products turns the key on a
new $100 million OSB plant.
By Harold Hatheway
Copyright 1996. Contact publisher for permission to use.
When Eagle Forest Products' state-of-the-art OSB mill beside New
Brunswick's Miramichi River began to roll on August 17,1996, the target was to produce
about 3,500 m3 of board a month, with probably half of that projected to go into the scrap
heap during the difficult months of startup.
Astoundingly, quality OSB has been rolling off the line since day
one at double the projected quantity, and with not enough scrap to mention.
These impressive results are undoubtedly a reflection of the
modern structure, topline equipment and a work force who are openly proud of their new
plant and of what has been achieved in getting it onstream. A couple of years ago what was
here instead was an abandoned, dilapidated chipboard mill, filled with rusting, archaic
Eagle Forest Products was just a gleam in John Godfrey's eye in
1991, when a Noranda subsidiary closed the old plant, leaving some 150 mill workers and
300 loggers out of work, and the provincial government as the reluctant owner of a
derelict mill. Godfrey, a typically reserved New Englander, explains the trials and
tribulations of taking an idea through to construction of a $100 million plant as
Representing the fifth generation in timberland and sawmill
ownership, Godfrey is graduate of Harvard Business School, has already developed and run
two OSB mills; the first in Maine in 1980, and the second, Highland Forest Products PLC in
Scotland in 1982. For this project, Godfrey spent two years assembling partners and banks
to provide the financing, with "not a nickel of government money," he notes
pointedly. He did take the government up on its offer of the old mill and site for $1, on
condition, of course, that a new plant take its place.
Partners in the Eagle project include MacMillan Bloedel Ltd.,
Temple Inland Forest Products, Stone and Webster construction and Eagle Trust, a group of
native funding sources brought together by Chief Augustine, a prominent NB native leader.
Canadian Imperial Bank of Commerce is a major financial source.
Godfrey makes the remarkably trouble-free startup sound simple,
but it involved months of workforce interviews, selection and training, engineering and
construction details, and equipment selection. Clearly, his background in building the two
earlier mills helped immensely.
The short term problem was finding enough white pine sawlogs
from a much larger area to keep the AGAWA sawmill operating. EB Eddy hired more buyers who
aggressively pursued more sawlog resources in the Ottawa Valley and the United States.
Secondly, they took a much more aggressive approach to trading wood with other companies.
Finally, they launched a cooperative private land program, whereby they would make it
worthwhile for loggers and private land owners to harvest smaller amounts of good quality
white pine on their property.
They developed central delivery locations, the largest being
Nairn Centre just east of Espanola, and organized two way transportation where sawlogs
went to Sault Ste. Marie, and pulpwood returned to Espanola.
EB Eddy made it worthwhile for loggers to include sawlogs on top
of their pulpwood loads. "We told them that we'll set up a convenient drop off
point," says Litchfield, "we'll scale the wood, we'll pay you promptly, we'll
sort the wood, we'll create loads so that we combine six logs from the independent logger
and the seven logs from the First Nation down the road, put them together and send them to
Sault Ste. Marie."
That solved the immediate problem. But what about the sawmill's
long-term future. EB Eddy is committed to the AGAWA sawmill over the long haul, according
to Litchfield. That's more commitment than mill employees have heard in a couple decades.
A tour of the mill is like stepping through a time machine. The
mill employs 200 workers, operating a large and small log line dating back to the 1940's.
There were a few modifications installed over the past 20 years, but not many. EB Eddy
purchased the mill from Lajambe Forest Products in early 1995.
AGAWA operations manager, Juhani Pulkkinen, says the mill
operates this way. The mix of 60 percent white pine sawlogs, and 40 percent hardwoods are
firstly sorted in the yard for diametre. The mill produces lumber from white pine for two
weeks, then hardwood for two weeks. As a result of last year's changes to the supply of
crown wood, AGAWA's fibre mix will change to 60 percent hardwood, and 40 percent white
pine, representing a two week hardwood, one week white pine production rotation.
The logs are conveyed through a Nicholson ring debarker, and the
debarker operator decides if the logs enter the number one or two line, that each feature
double cut band saws. The number one line accepts logs 14 inches and up and is used for
grade sawing. From there, the logs enter a horizontal resaw edger and trimmers. Logs
entering the small log line are simply broken down to a six inch cant, run past a bull
edger and trimmers, and then into the green board way. Many decisions and tasks are still
handled manually at the AGAWA mill. That is about to change.
Pulkkinen has spent considerable time touring other sawmills and
addressing AGAWA's main priority, that is developing a log profile from an extensive
inventory conducted on their Crown leases. They want to ensure that changes they make to
the mill will reflect their log supply. Among their findings so far is that they can
expect considerably more pulpwood and hardwood. They will harvest many more smaller and
larger logs than what historically were prime quality pine sawlogs.
What EB Eddy has also discovered is that AGAWA's future depends
on the pursuit of quality over quantity.
The future is in manufacturing hardwood lumber in predetermined
sizes and specifications for flooring material and special furniture. "We have
identified a flooring mill in our capital plan," says Pulkkinen. The future indicates
a bountiful supply of tolerant midgrade hardwood logs. "With the volume that will be
coming in for the next years, we are going to develop a lot of flooring stock, which means
we could supply a small flooring mill with all our own material." Litchfield confirms
EB Eddy has had 'very serious discussions' with other companies about the potential of
manufacturing flooring material, and how the mill should be designed to accommodate it.
Pulkkinen adds that current production is about 30 million board
feet per year, and they hope to sustain that with plant modifications slated to take place
over the next two years. AGAWA has already begun its new pursuit of quality. They have
trained their own staff on proper log preparation prior to entering the mill, and they
have hired a quality control person to conduct random quality control checks in the yard.
The second step is to install laser scanners at the mill's front
end. "We're looking at log scanners right now," says Pulkkinen. "It will
have the capability to tie into our bands and into our edger. We are looking at optimizers
at the edger and head rigs to get the most off the log."
AGAWA will continue to operate their large log line to saw
quality logs and maximize value. Most initial changes will occur on the small log line.
"We felt that with a drop in log size -- smaller logs, and rougher logs -- that what
we require is to replace the number two side with something that would have significant
throughput to reduce our costs," says Pulkkinen. "What we are look at is a twin
band into a bull edger." They have yet to identify the optimum log size in order to
refine their small log line equipment selection. What will happen, however, is that the
current manual sorting system will be replaced by either a sling sorting system or a J-bar
Pulkkinen says they anticipate some job loss, but those employees
would most likely be absorbed in other departments. One area where they will be increasing
employment is in their veneer plant. "The veneer plant had been limping along
here," he says. "We're going to be bringing it into a full shift, so it will
create additional employment. We will add 20 to 30 people there." Among improvements
slated for the veneer plant are an X/Y positioner to improve recovery and value, as well
as rotary clippers. That is part of the overall modernization, and will cost $3 million.
While the future looked bleak at EB Eddy's AGAWA sawmill, they
have simply shifted direction to create manufactured products that more realistically
reflect their tolerant hardwood wood supply. Over 200 jobs stay viable in the process.