May 2005 - Logging and Sawmilling Journal -

Ontario mill Precut Hardwood is taking on the Rodney Dangerfield of timber—birch, a tree that gets little respect among sawmillers—and is making success of it by making sure as much of the tree as possible becomes a money-making commodity.

Even hardened loggers can’t deny white birch is a pretty tree. Beavers love it, and its bark was long esteemed by canoe-makers. But the tree with the striking white bark has never won much respect in the sawmill industry. It floats a canoe, but all that twisting, spindly wood can sink a mill.
“Everybody in the industry knows you can’t build a sawmill and saw birch,” says Carl Holtz, a birch believer and president of North Bay, Ontario-based Precut Hardwood Inc. “In any given stand of birch there’s not enough high quality stuff to support a conventional sawmill. Every time I mentioned white birch to anybody who knew anything about the forest industry, they said it can’t be done.”
Holtz is keen on proving birch can pay its way, and with more than a decade of milling under his belt, his pallet wood/firewood business has hit its stride. Early this year, Precut Hardwood finished a mill expansion that included more than $500,000 for a new building and equipment, and is working towards planned volume of 30,000 cubic metres of wood a year.

The secret lies in keeping the business simple: bigger-diameter wood is cut for pallets in two sizes: 7/8x4 and 7/8x6, typically in 40-inch lengths. Most of the production is sold for high-quality reusable pallets. The tops and the small stuff—usually about five inches and smaller—is cut, split, and bagged for the kind of firewood that ends up in provincial parks and urban fireplaces.
This approach keeps handling to a minimum, and ensures as much of the tree as possible becomes a money-making commodity. “Every time a logger touches white birch he loses money. The more you start playing with it the more you lose money,” Holtz says. “Some logging companies have told me this is the first time we’ve seen that we can make money out of white birch.”

Carl Holtz of Pre-Cut Hardwood on the equipment approach they use to produce birch: “What we do is build a piece of equipment to do a certain job, and then we’ll fill in the gaps with labour until we can work out a better way.”

Holtz hit on the idea of a birch-only sawmill when he was living in Kirkland Lake. He was working as a machinist, but as the son of a logger, he was drawn to the bush. “Back in the mid-1980s they were bulldozing acres of white birch to plant jackpine. Up there they didn’t cut any birch at all, and we used to pick it up for firewood.”
While Carl and wife Sue began a business cutting and selling firewood, he still wondered if there might not be a better way to use those white trees. His musings were cut short by a near-fatal accident in the bush. “A poplar fell on me, crushed my ribs and just about did me in. I drove myself about 10 miles to the house and then called an ambulance.”

After a lengthy recovery—the crushed ribs had just grazed Carl’s heart—the family returned to North Bay. Holtz taught in the machine shop at North Bay’s Canadore College, did some cutting and skidding, and continued to muse about making a buck from birch. “The birch thing still stuck in my mind,” he recalls. “Down here, birch was available again. The big companies didn’t want it.”

Using a homemade portable bandmill and with Sue’s help, Holtz began experimenting with sawing short, twisty hardwood. Eventually they began hiring help, first setting up a small mill near Tilden Lake, north of North Bay, and then moving further south to the site of the former Hampel-Gibson sawmill. For Holtz, things had almost come full circle. As a 13-year-old he’d stacked slab wood at the Gibson mill. “Now I’m back here, still doing the same job,” he jokes.
Conventional sawmilling techniques for dimensional lumber seldom work with birch, because the species is simply too variable. Rather than go against the grain, Precut Hardwood is designed to handle the twisted and gnarled trees that give other mills headaches. “We had to figure out a way to saw down to five inches, and the pallet lumber fit right into that. Then we had to figure out how much recovery we can get. It took us ten years to figure all this out.

“This mill is totally specialized,” Holtz adds. “If we need a board that’s six feet long, we have to go to RONA and buy it.”
Boosting recovery was a major economic concern. “Everything that didn’t go through the mill was a loss. That’s why the firewood was so important. We could make a profit doing firewood.”

Selling the tops for pulpwood is little better than a loss leader. The spindly, twisted wood stubbornly resists efficient loading, stacking, or handling. “We were selling it for almost the same price as we bought it for. I was telling my accountant you don’t even need to put the batteries in your calculator to figure that out.”
By bucking, splitting, and bagging the tops for firewood, Holtz has found a growing market. The wood is ideally suited to hot, quick fires for campers or urban fireplace owners, and the small pieces pack efficiently and dry quickly.

An older Cat 302L loads logs into the mill’s rebuilt Morgan slasher. Once in the slasher, logs are cut into 40-inch lengths, for pallet stock production.

Demand for the wood has grown as Holtz has expanded sales to the provincial park system. “We started out with 10,000 bags a year, then 25,000. Last year we sold 130,000 bags,” Holtz says, adding firewood deliveries keep the mill’s Western Star tractor-trailer running seven days a week through the camping season.
If the mill does get a load of nice, uniform, straight logs, that’s a nice bonus. Suitable sawlogs or veneer logs are set aside and sold to Tembec. Holtz gestures towards a trucker wheeling into the yard with a load of tall, straight birch, many of the logs 50 feet long. “You don’t see many loads like that. We might get three of those a year. The guys from the mill are going to run out and hug that guy.”
Birch makes sturdy pallet wood because it’s strong and relatively flexible. “It takes a nail really well. It’s not as brittle as maple. The precut hardwood that comes out of Quebec is mostly maple, so it’s heavier, more brittle, doesn’t nail as well,” Holtz says. “We cut, pile, and ship green, and then they nail green, and the skid dries.”
Holtz isn’t averse to producing another product, possible lumber for furniture or hardwood flooring, but he hasn’t found anything else as lucrative as the pallet business. “We like this because it’s steady. They look after us. We make such a high quality product, they want to protect us.”

Most of the lumber produced is No 1 pallet stock for Thomco Pallet and Box in Tweed, Ontario. Thomco, in turn, supplies reusable pallets to manufacturers and large retailers including grocers, hardware dealers, and big-box stores such as Home Depot and Canadian Tire.

The lumber begins as logs drawn mostly from Crown land as far afield as Pembroke and Mattawa in the east and Verner to the west. The tree-length wood is piled in the yard with a Hood 24000 loader/slasher (the slasher itself is no longer used.) Birch is so variable there’s really no such thing as a typical log, but a common diameter is in the range of seven inches, with lengths of 35 feet. Wood that’s bigger than 14 inches is set aside and canted by a Norwood portable mill.

The wood is ferried to the mill by a John Deere 5440 loader equipped with a Bateman quick connect grapple, and fed into the slasher by an older Caterpillar 302L that has its original clamshell. Once in the slasher, “We cut our logs in 40-inch lengths. It takes a pretty crooked tree to throw us off,” Holtz says.

Inside the mill a scragg slabs off the two sides. The slabs are run through a Morgan edger to produce four or six-inch boards, and the remaining two-sided cant is either split or has the third side slabbed off to produce a three-sided cant. The wood flows through Brewer and Baker resaws to produce 7/8ths boards, and then packaged for shipment. No 1 wood is stored inside, or in one of the SLH vans outside for transport, while the No 2 is stored outside.

The tops are processed for firewood by a Finnish-built Hakki Pilke processor. The tractor-driven machine bucks and splits the wood, and keeps two men busy loading the tops and retrieving the firewood.
“The mill is a mix of purchased, modified, home-designed and built equipment. In a lot of cases I couldn’t find anybody who could build the right machine for what we’re doing, so we built or designed it ourselves,” Holtz says.
Most of the equipment comes from US suppliers, including Morgan Saw Co Inc, Brewer Inc, and Baker. Holtz says the machinery is usually bought with price in mind. After the purchases have been run for a while, the upgrades begin, with Carl, his son Wyatt, mill foreman Tim Hampel (a third-generation member of the milling family that once operated on the Precut Hardwood site), and millhands Ross Reed and Eric Quaisser wielding the torches.

One example is the slasher unit at the front of the mill. Holtz shopped around, and opted for a $50,000 slasher from Louisiana-based Morgan. “We ran it for three months and rebuilt it for tree-length—added a 20-foot trough, made it wider, boosted hydraulic power. It’s basically a new machine,” says Wyatt.
Beefing up the equipment proved necessary because wet or frozen birch is hard on equipment. One estimate pegs the weight of wet birch at up to six pounds per board foot.

Wyatt is also musing about a home-built processor to replace the Hakki Pilke units. Wyatt plans to convert the tractor-driven firewood processor to electrical power, and is considering building a heavier, more powerful unit that can better withstand constant use.
Overall, “We want to smooth out the operation,” Holtz says. “What we do is build a piece of equipment to do a certain job, and then we’ll fill in the gaps with labour until we can work out a better way.

“I don’t mind the labour. I kind of believe in labour myself. We’ve worked hard on management, training, and health and safety.”
By producing green wood, the mill eliminates the need for debarking (any wane on the No 1 lumber is removed by hand) and kiln drying. On the other hand, the mill also requires a lot of manual sorting and handling. To reduce fatigue, the crew on the packaging floor changes jobs every two hours. The mill operates 10 hours a day, four days a week, with Friday reserved for maintenance and upgrades.
While the mill and firewood operation develops under Wyatt and Hampel, Holtz spends a lot of time securing more birch. Once among the least-loved of hardwoods, birch is becoming more popular, not just for pulp but for everything from light-coloured cabinets to furniture and floors. The wood’s newfound popularity makes it tougher to find. “The reason we did this in the first place was because white birch was available—was available,” he emphasizes.

Since Precut Hardwood got into the business it has been joined by another birch mill, Temagami Forest Products. Temagami draws from Crown land to the north, forcing Precut to consider more southerly areas and private lands to augment its supply.

One option is to start a logging subsidiary that will secure more birch from privately-owned land. Another concept—already in operation—involves running a Norwood Industries Inc portable bandmill mill to produce cants on the landing. “It’s an experiment, but I can afford to pay more on the landing, and that helps me compete with Tembec and Domtar for wood they’d buy for pulp. It also gives me access to an alternative wood supply.”

Precut Hardwood is definitely a family affair. While Holtz looks after the big picture (and cuts out of the office to shovel sawdust, unload logs, stack lumber and any other job that needs doing), Wyatt concentrates on mill design and operation. Wyatt’s wife Karen (an environmental biologist by training) works part time on health and safety and environmental planning. Daughter Nancy works in accounts and payroll, and her husband Paul is supervising in the mill, looking after issues including training and quality control.
And remember Sue? Carl’s wife has been involved in the project since day one. “The two of us did our first load of lumber by hand. She worked in the mill during the first couple of years,” he says. Now Sue looks after the financial and administrative side of the business.

Precut Hardwood stresses a team approach, where workers change jobs as the need arises. “When we hire people we tell them, ‘You don’t have one single task here. Your job is to make this run, and everybody has to help with that.’”
After all, when you make a living dealing with a species that likes to grow in almost any direction but straight up, you’ve got to be flexible enough to go with the grain. In the birch business, there’s no straight path to success.

Main Page