Forest Renewal BC
A Perfect Fit
WELL POSITIONED UNDER NEW OWNERS COLUMBIA FOREST PRIODUCTS, LEVESQUE PLYWOOD ACCELERATES EXPANSION AND BROADENS ITS VALUE-ADDED PRODUCT LINES.
By Tony Kryzanowski
The purchase of Levesque Plywood by Columbia Forest Products in Hearst, Ontario has accelerated expansion plans, and put the company on a solid footing after the passing of the company's co- founder in 1993.
A sudden change in ownership is often the biggest challenge a growing company must face. Levesque Plywood had to overcome that challenge with the passing of Yvon Levesque. But company management has deftly handled the company's transition from a private company to a division of Columbia Forest Products. Its first chapter is now closed, and chapter two is just beginning.
"After Yvon's death, the company had to reorganize, and shareholders had to decide exactly where the company wanted to go," says General Manager Donald Bisson. "At that time, it was decided by the remaining founder Herve and Yvon's family that we needed to find a strategic partner to help the company progress. As a stand-alone facility, it would be difficult." As it turned out, Columbia purchased Levesque outright in June 1996.
"Columbia Forest Products was a natural fit," says Bisson, since they are the largest producer of hardwood plywood in North America, and are focused on value-added products. "It has given Levesque a new life." "Our vision since the mid-1980's was to have all our panels in a finished form," adds Bisson, "be it hardwood, plywood, melarnine painted ... to have value added to all our panels. Columbia Forest Products is oriented toward that objective."
In addition to acquiring a company with plenty of potential, the purchase was also beneficial to Columbia from a strategic standpoint. It gave Columbia a larger presence in the Canadian marketplace.
Levesque had already planned a plywood plant expansion, and began the project in 1994. They originally wanted to double production. Columbia's involvement has meant a faster and better expansion project.
"What Columbia brought to this location was a fine-tuning of what was needed in the plant," says Bisson, "what had to be done immediately, versus what we had anticipated doing a few years down the road."
After spending $16 million on new equipment and machinery, the plant has more than doubled production from 2,800 panels per day to 6,000, or 68 million feet annually on a 3/8" basis. They had originally planned to double production by 1999. The plywood plant now has 215 unionized employees, with over 70 new jobs created in the past year and a half.
The Levesque division of Columbia Forest Products consists of four separate operations - a plywood mill, a particle- board mill, and a melaniine overlay mill, all located in Hearst, and a hardwood plywood mill 1,500 km away in St. Casimir, PQ. They employ a total of 420 workers.
The company was founded in 1961 by Yvon and Herve Levesque, as a 4X4 plywood plant. After a major fire in 1964, they rebuilt as a 4X8 mill, and expanded their equipment line and production volume over the years.
"The main concentration of the plywood plant had been the 4X8 sanded industrial panel with an aspen face and back," says Bisson. In 1993, they started to overlay hardwood veneers, and that eventually grew to 20 per cent of their production. Their long-term plan was to eventually evolve into a hardwood veneer plant. Levesque needed to overcome their handicap of greater distance to market, being located in northern Ontario. A value-added product fetched better return, so transportation costs became less of an issue.
Another positive influence in moving toward a hardwood veneer mill was greater market stability.
"That type of market tends to be less volatile than the commodity markets, where you have your major swings," Bisson says. "You don't have the highs, but you don't have the lows either."
Half of their current production is still aspen sanded grades, and Bisson says they will always produce a percentage of this commodity product.
During the evolution of Levesque Plywood, Yvon and Herve Levesque struck out in other directions, and those decisions helped the company maintain its primarily Canadian market. In 1971, they started a greenfield, particleboard plant, which now produces 70 per cent more than it did when it started.
In 1988, they built the melamine overlay plant "to basically add value to particleboard panels," says Bisson.
In 1990, the company purchased the St. Casimir, PQ hardwood plywood plant to gain knowledge on the manufacture of hardwood veneer.
Because the Canadian market is smaller, Levesque sold a lot less volume than it would have if it had been tied into the American market. Instead, they created a market niche with customers who needed smaller orders and variety.
"One of the major assets of Levesque is that on the same truck, you can put melamine, particleboard, hardwood plywood, and industrial sanded aspen plywood," says Bisson.
Levesque has a history of carefully planned expansion, and also frugal financial management. That shows with their latest expansion project.
Bisson says Levesque has managed to achieve a major equipment upgrade by combining new and used reconditioned equipment. He says a used, revamped machine can sometimes cost 50 cents on the dollar, and still do the same job.
They hired the Sault Ste. Marie engineering firm The Barker Group as consulting engineers, and hired local contractors whenever possible for installation.
Starting at the front end, Levesque purchased a new slasher from TS Manufacturing, located in Lindsay, Ont. Local contractor, Commercial Builders, providing new settling ponds, forwarding system, and installed a new, 90 percent efficient natural gas heating system, supplied by BC's Improheat.
Because of their association with Columbia, Levesque was able to purchase a new lathe in 1996 instead of 1998. It is a used Coe charger and 8' lathe. They have also installed a Durand rotary clipper and stacker, as well as a refurbished Coe dryer.
They then installed a 32-opening Durand pre-press, with loader and unloader, and two Globe spreaders. Levesque was extremely fortunate when it came to purchasing a new press, a 1974 vintage Burrard press that was slated to be installed in a plywood mill in New Brunswick. The mill was never built. "It was still sitting in its crate," says Bisson.
Other improvements include installing a wood patching line, a new putty line, modifications to their sanding line and installing a new dry stacker.
They are in the process of building a new glue kitchen, and have installed a pelletizer for their sander dust, which will be marketed to wood stove owners.
In addition to major equipment, they have mechanized their production line as much as possible with computer technology.
Levesque Plywood uses trembling aspen exclusively. Prior it expansion, they were granted an additional wood supply as part of the Ontario Ministry of Natural Resources Northeastern Hardwood Project. By the end of 1997, they will consume over 200,000 M3 of aspen annually.
Their first priority for modernization has been the plywood mill, but the particleboard mill and melamine operations are not far behind.
"We want to bring the particleboard mill to 30 per cent more production in the next few years," says Bisson.
The melamine plant operates 24 hours a day, seven days a week, producing 3,500 panels per day.
In addition to stability and accelerated growth, Bisson says Columbia's purchase brings the strength of a global marketing strategy. He adds that they know how to design a mill to fit the market.
"That's a big plus, Columbia being the largest hardwood manufacturer in North America," says Bisson, "and being very customer-oriented. It's given new insight to marketing the Levesque product." While their main market has been Canadian, Columbia will help them make inroads into the US.
Thanks to Yvon and Herve Levesque's vision, Levesque Plywood has progressed sufficiently to attract the attention of a major global player in the plywood market. The result is a stable, long-term work environment for those they left behind. That's all employees can really ask from their founders once a transition occurs.
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