February 2003 - Logging and Sawmilling Journal -

Interfor’s Hammond Cedar Division has undergone an upgrade that will maximize product and value extraction at the mill.

Employees at Interfor’s Hammond Cedar Division in Maple Ridge, BC—just up the Fraser River from Vancouver—received some good news this past spring with the company’s announcement of a major upgrade for the Hammond operation.

Over the years there have been a number of improvements made to the Hammond mill, the largest cedar sawmill in the world. The last major rebuild in the sawmill, however, was back in 1982 which is—in terms of sawmill technology—a lifetime ago.

Vancouver-based Interfor, with extensive operations on the BC Coast, is intent on not only being a survivor in the current tough times in coastal sawmilling, it intends to be a leader. So the company made the decision to invest the not insignificant sum of $5.3 million to do the upgrade at Hammond. While there were a small number of jobs lost as a result of new technology, the remaining 300 jobs have been made that much more secure, or as secure as they can be in the forest industry these days.

The Hammond upgrade project, completed this past summer, involved the installation of a new optimized trimmer line from CAE Newnes, now part of Coe. The technology is already being put to work maximizing product and value extraction from the high value cedar logs going through the mill. CAE also supplied two lug loaders and some sorting equipment.

The upgrade also included new lumber grading stations, two grade readers from Lucidyne Technologies and the addition of six bins to their existing 60-bin sorter, which allows for better sorting of products for remanufacturing. This comes on top of the recent addition of a new gang edger from USNR and builds on other changes made in recent years, such as adding five new Salton dry kilns. Overseeing the upgrade was consultant Keith Spencer, an experienced sawmill hand, of Black Ink Consulting.

The new equipment adds to the already strong emphasis on value-added and finished products at Hammond, explained Peter Edwards, the operation’s manager. “We’re very focused on cutting high value lumber in the sawmill and adding margin by processing finished products,” he says. “With every product we run, we have to constantly look at improving the margin.” Achieving that margin—or profit—on what they produce is somewhat of a mantra at Interfor these days. The company, like many coastal producers, was seeing some lean times not so many years ago. From that background has emerged the strong focus on hitting margins at operations.

Edwards explains that in addition to the sawmill, Hammond operates two very different processing facilities. There is a high-speed planer mill operation that does a lot of traditional cedar products, such as decking and fascia.

“We also have a siding plant which is more labour intensive, but it processes very high value products. It’s like two different worlds, each with their own production environment.”

In terms of opting for the new high-tech trimmer equipment in the sawmill, he noted that, of the mill’s two old lines, one had no trim capacity at all and the other was the traditional “push-pull” set up.

“We really did not have the capacity to do the best job with trimming. With our old equipment, trimming had to be dealt with in the processing plants.” And that approach, to sum it up, just did not cut it anymore.

To complement the changes to the trim line, they also made a lot of flow changes within the mill. “There had been a lot of handling of lumber that could be eliminated or reduced,” says Edwards. “What we’ve done is ‘one-timed’ the lumber from the optimized edger and one of the gangs. Most of the material now goes straight across to the lumber line, rather than through drop sorter stations. There are some re-man pieces that we can’t ‘one-time’, but that, by and large is our approach.” The overall goal driving all this is minimizing handling and simplifying mill lumber flow.

With the optimized trimmer, the mill intentionally selected proven equipment from CAE. That still involved training of employees, however. Training of graders was done in advance of the upgrade so they could fully capitalize on the equipment improvements once they were in place. There was also some pre-training done on the optimizer which was key to the overall success of the project.

“Cedar is a completely different business compared to the dimension mills in the BC Interior,” explains Edwards. “We have to give a lot of thought to how we trim our products to achieve the highest value, and we need to involve our people in that to achieve the best lumber recovery and value. The new equipment also gives us the ability to cut in two, which also adds value.” The mill does have a core product line, but they are constantly changing in order to meet customer needs, he says.

Interfor to move value-added operation to US

As part of its central goal to be a competitive player in BC’s coastal forest industry, Interfor has had to make some tough decisions that will allow the company to survive and keep its operations viable in the face of a 27 per cent countervail on product going to the United States.

The latest decision came this past summer, with the announcement that it would relocate its McDonald Cedar value-added operation to Sumas, Washington in an effort to reduce the crippling effects of the duties. McDonald Cedar is in Fort Langley, across the Fraser River from the Hammond mill, which supplies the operation with much of its cedar. McDonald Cedar is paying about $800,000 a month in duties with the countervail, an unsustainable situation.

“This was a tough decision because of the impact on our McDonald employees,” said Interfor President and CEO Duncan Davies, in announcing the move. “Ideally, this operation and the related jobs would have remained in Canada.

“While unfortunate, this decision should not come as a surprise. The devastating effect of the 27.2 per cent duties, coupled with the already high costs associated with doing business on the BC Coast, make it uneconomic to keep this operation in Canada.

This is an urgent issue because the duty puts our entire business at risk.” Interfor has already seen a shakeout of its operations over the past decade, with the outright closure of a number of coastal mills, including Fraser Mills last year.

Production, with the exception of a one-week shutdown, carried on at the mill as the upgrade proceeded. The new trim line was built at an elevation above the old equipment. A good deal of the work was also done on weekends to allow business to continue as usual during the week.

One of the largest challenges seemed to lie in the overall change of approach at the mill, rather than technical matters. “The biggest change was in the approach we took with ‘one-time’ handling and mill lumber flow,” says Edwards. “Our crew was used to ‘piling up’ the back end of the mill in the past and the new line has required a significant change. In addition, the new system has just one line and the focus now needs to be on efficiency and lug fill.”

Mill employees made the choice to be flexible and adaptable, agreeing to changes in work scheduling to allow continuous operation of the back end. The Hammond mill produces high value products, but the cedar logs that go into the making of those products are also high value. As a result, lumber recovery is important and was an integral part of the upgrade.

“We wanted the latest technology in terms of scanning each piece of lumber. And we are seeing signs that the equipment we installed is paying off as projected.” Edwards says the end result of the upgrade is that a “cleaner” product leaves the sawmill—essentially more higher value pieces, with more pieces on grade.

“The projected benefits are improved lumber recovery, increased production, grade accuracy improvement and reduced costs. The upgrade simply means that we end up with a product that is better graded and better trimmed. That’s going to allow the planer mills and the value-added facilities within Hammond to achieve a higher margin and operate more efficiently.”

And while there is a strong focus on quality and production at Hammond, Edwards says the mill—with a successful safety record—also has an equally strong focus on safety. “We believe that our overall success is based upon making safety, quality and achieving margin all equally important.”

Interfor has large timber cutting rights in BC, with 13 timber licences amounting to an annual allowable cut of about four million cubic metres of traditional coastal species such as Douglas fir, western red cedar and hemlock.

Hammond uses 630,000 cubic metres of cedar to produce 155 million board feet of product a year. Approximately 70 per cent of that timber comes from the Interfor licences, with the balance purchased wood.

Hammond receives the entire range of log sizes, from the smaller diameter gang logs that are cut at the Maximill quad line to the larger logs, which go through the two headrig lines. There is also a wide range in terms of log quality. “Cedar is very variable in quality and can have a fair amount of rot,” says Edwards.

“Our job with the primary breakdown equipment is to extract the most value and fibre out of every log." An external issue driving efficiency these days at BC’s coastal sawmills is pending changes to the tenure system.

The Liberal provincial government has already said that it wants to see more logs sold on the open market—which would partially satisfy the Americans in the current softwood dispute. With this scenario, companies—whether they be Interfor, Weyerhaeuser or small independents—would have to purchase more of their timber on the open market and rely less on forestry tenures. These changes would make it even more important that sawmills are efficient, since the overall cost of purchasing timber would rise.

But being efficient and achieving margins is what it’s all about at Hammond right now, says mill manager Peter Edwards. “We’ve got to do everything we can within our control to improve our operations and reduce our costs.”

Future Succcess means doing things differently at the mill

The way the mill’s employees approach their work has been key to the success of the $5-million Hammond upgrade and is also going to be an important factor in the operation remaining competitive, says mill manager Peter Edwards.

A company can install all the advanced sawmill equipment that it wants, but it’s the people who run all the equipment. “That can make you or break you,” says Edwards. “We’re fortunate in that our employees are stepping up to the challenge of learning and working with this new equipment.”

The success of BC’s coastal industry in the future—and the retention of jobs—is going to lie in the industry and its employees looking at doing things in a different way, he says. The “same-old, same-old” no longer cuts it in an environment with rising log costs, high labour rates and a 27 per cent US duty.

“Being flexible and looking at doing things differently is going to continue to be an important way of staying competitive on the coast in the future,” says Edwards.

While it has been a number of years since there have been major labour disruptions in BC sawmills, companies and mill employees alike have to realize that stoppages carry a huge toll. In the case of cedar, competing products are just waiting to snap up the business. The benefits of workplace stability have already been driven home to a number of pulp producers in the province, who have recently signed six-year agreements with the unions

The industry might be wise to consider such long-term agreements on the solid wood side. The contract covering workers in the solid wood sector expires this June. The

industry and the union have not yet indicated whether they too will be seeking a long-term agreement.

“We have to always keep the customer in mind,” says Edwards. “They are not interested in labour disputes or the reasons why an order might be late.” And rather than a dispute meaning an order for cedar is simply delayed, that order could just plain disappear. “That customer could be lost—they’ll buy vinyl siding instead. The cedar business is losing market share to alternative substitute products.”

In the past, there may have been a small sense of complacency in the coastal cedar business, with strong demand for their high-value products. But coastal BC mills, like all other sawmills, can’t take business for granted anymore, and judging from the number of closures in recent years, can’t take their own survival for granted.

“It may sound harsh, but I think the coast still has to go through a lot more change yet,” says Edwards. “At Hammond, we plan to be one of the survivors.”

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