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Oct  2003

Contractor Profile

Seizing logging opportunities

BC’s Lemare Lake Logging has grown over the years by seizing business opportunities, but they carefully make sure they are the right opportunities.

By Paul MacDonald

From left to right: Dave, Eric and Chris Dutcyvich, and Ian Zimmermann of Lemare Lake Logging. Last year, the company harvested 590,000 cubic metres stump to dump for the major forest companies, did 350,000 of contract harvesting and built 141 kilometres of road.

In the past decade, growth for BC logging contractor Lemare Lake Logging has been all about seizing opportunities. In recent years, the BC forest industry has been hit by a triple whammy—tough market conditions, environmental pressures and a US countervail. But despite that, there have been new business opportunities and Lemare Lake’s Dave Dutcyvich, with sons Eric and Chris, have been keen about seizing them—provided they are the right opportunities. Dave started Lemare Lake Logging in the mid-1980s, when he purchased coastal logging outfit Inlet Contractors.

He had worked for Inlet for about 20 years, so he knew the operation from top to bottom. They started out doing work for industry major Canfor, which has large timber tenures on northern Vancouver Island. They did stump-to-dump work for Canfor, and some road construction. Several years later, the company started doing work for MacMillan Bloedel (now Weyerhaeuser) also on the north island. Business developed to the point where they were doing about 250,000 cubic metres of harvesting a year, and about 25 kilometres of road building. Added to that, they also got involved with additional harvesting work through the province’s small business program, both through harvesting on their own timber sales and logging for other timber sale bidders.

What really ramped things up for Lemare Lake, however was the purchase of long-time contractor, Cheslakee Logging, which had been run by the Hanuse family, in 1992. “It was an outstanding fit for us,” says Eric Dutcyvich. Cheslakee was operating in the same areas as Inlet Contractors, Lemare Lake’s first acquisition. “Things changed as a result of a consolidation of Canfor contractors,” he explains. “There were three contractors doing sizable amounts of volume, but they were in a very tight area on northern Vancouver Island. With Cheslakee, we were taking over a contract on which we had considerable experience and it also got us back on Canfor’s Tree Farm Licence.” Also in the early 1990s, Lemare Lake started doing work for another major, Western Forest Products, building up to 40 kilometres of road a year. They also started doing a timber re-haul for Western Forest Products, transporting some 300,000 cubic metres a year of spruce and cedar across the Island.

The most recent of the major business opportunities came in 1998 with the purchase of Tribune Timber, a long-time Western Forest contractor. “Tribune’s contract had been moved to the Mahata River area, where we were already operating for Canfor and Weyerhaeuser, so it involved basically consolidating our work over there.” Around the same time, they also purchased a trucking contract for forest company, Interfor. “There were a lot of synergies happening for us.” In recent years, they have stepped up their activity in the small business program, while at the same time making sure that their major customers are still well taken care of. “We really are true full phase market logging contractors and because we have gained some of our own tenure that required forest engineering and forest development plans, we have developed our own in-house staff,” says Chris Dutcyvich.

That includes two RPFs and three forest technicians. But part of their strategy is to also offer professional forestry services on a contract basis—while their own tenures provide significant work, it is not enough to keep the RPFs and technicians busy full time. “To support that kind of professional infrastructure, we go and develop outside work. Our client list for this kind of service is growing—a lot. We definitely approach it very aggressively. We view it as a good opportunity to develop other aspects of our business.” They’ll take on the job of forestry planning, roadbuilding, harvesting and even marketing logs for clients. “We’ve purposely developed our ability to market logs because it’s important to look after that side of things.” It’s going to become increasingly important with the changes in BC forest policy, adds Chris.

The Dutcyvich family has had a very clear game plan on where they want the company to go, and that game plan is to continue to take advantage ofopportunities. “A lot of what we’ve done has been very opportunistic,” says Eric. “And that opportunism fit very well with what has been happening in the forest industry.” By diversifying their customer base, they are also diversifying their risk. Unlike a contractor who is dependent on one forest company, if one of Lemare’s customers want to take a woods shutdown, Lemare Lake changes gears and re-focuses their efforts on the ongoing work of other customers, and their own timber harvesting. “We’ve found that we are able to keep our crews working and our equipment better utilized by working with a number of customers.” But David, Eric and Chris fully admit it can be a challenging balancing act at times. “There is a lot of management because if all the customers want to go at the same time, it’s a bit of juggling act, moving the equipment around. But it’s been a good thing for us because the more equipment utilization you get and the steadier your crew, the better you can work and the cheaper you can work. And really the more you can do that, the more work you can secure.”

Being too busy and being pushed to manage all equipment resources effectively, are good problems to have these days, adds Eric. Last year, they harvested 590,000 cubic metres stump to dump for the major companies, did 350,000 cubic metres of contract harvesting, built 141 kilometres of road, and moved over one million cubic metres of wood with the contract hauling. Key to all of this is plain hands-on management. Rather than being in the office, David, Eric and Chris are more likely to be out in the bush or perhaps at the shop.

They keep in touch with each of the work sites daily, and make sure they are personally out to the various logging and roadbuilding sites often. “What that means in this part of the country is an awful lot of pick-up truck driving, a lot of flying and a lot of boats,” says Chris. “But it comes down to a simple saying: if you don’t go, you don’t know.” Also critical are their experienced woods foremen who know this part of the coast, and what works in logging. The woods foremen, and all 240 Lemare Lake employees, know that it’s all about results. “We put goals and targets in front of people and are absolutely demanding that the goals are reached—no exception,” says Eric. “As a company, we are paid for results, consisting of kilometres of road construction and cubic metres of wood. And that has to be done safely, with quality and cost effectively.

Our customers are not interested in excuses; they are interested in results. And our employees have been outstanding at delivering results. I cannot overemphasize that enough.” And while they are always looking for additional work, there is still a laser-like focus on making sure current customers are happy. And that means not taking the business for granted. “One thing about Lemare Lake is that we view our customers as customers, and not as meal tickets,” says Eric. He notes that over the years, they’ve never had to go to arbitration or mediation with any customer. “We view customer service as absolutely critical. We like to think that if we deliver good quality service and a good quality product, everything else will look after itself.” Part of the effort to ensure they are able to deliver that service came this past spring, with the opening of a brand new 20,000 square foot service shop, just south of Port McNeill. In addition to servicing their own 200-plus trucks, logging and roadbuilding equipment, they will also be doing work for outside companies.

For the future, the Dutcyvich family intends to keep the company flexible, which seems to be a wise approach considering how dynamic the industry is right now, and that consolidation is continuing. They want to be able to benefit from the moves the BC government is making towards more market logging. Lemare Lake Logging’s conscious move to becoming more of a market logger should position the company well with the pending government changes to forest policy. “That’s something that we are watching very keenly, to see how the government’s new forest policy is going to affect our business,” says Dave”. “We are trying to stay ahead of the curve on that.” But they want to make sure the changes result in everyone working to the same high standards.

The provincial government, he says, needs to have accountability for all the people that are bidding, making sure they are paying their stumpage, paying their employees and harvesting according to the forest practice code. “We don’t want some fly-by-night outfit coming in here, not paying their stumpage, or their employees, and not operating safely and up to the code. This is a big concern for us. The government needs to put in bonding or large deposits to ensure accountability.” More market logging offers another opportunity to further diversify their business. “We want to create business relationships outside of our traditional customer base. By far, the major forest companies are our most important customers, and we never want to take that business for granted. But the industry is changing, and we definitely want to have a chair when the music stops.”

SIDEBAR pg 12

New shop a key part of Lemare Lake’s maintenance program


Lemare Lake’s new shop is a key part of the company’s very hands-on approach to equipment purchase and maintenance. Jack Dewitte, a very experienced heavy equipment shop hand, oversees the shop and its staff of heavy-duty mechanics. Dewitte has taken the lead on both modernizing Lemare’s equipment fleet and keeping it running on a day-to-day basis. While not talking about exact figures on overall equipment uptime, Chris Dutcyvich says they are able to achieve “amazing availability.” Some logging contractors take the approach of having brand new equipment, working it 24 hours a day, then turning it in after 5,000 hours. “That works well for them,” says Chris. “But our approach is a bit different.” They have a core of fairly new heavy equipment to handle the guaranteed work.

With the other less-scheduled work, they take good used machines into the new equipment-loaded shop, rebuild them completely and use them for the contract, sometimes one-off work. The uptime on this rebuilt equipment is impressive, says Chris. “We have not introduced a lot of new equipment into the company for quite a while. That way we not facing a huge amount of new capital costs. But we are still keeping our equipment modern and relevant with the rebuilds.” Some of their equipment is run 24/7, but they operate it that way because it makes sense from an overall business point of view—not because they have to keep up the payments on a new piece of equipment.

To keep their operations current, they certainly purchase new equipment. Last year, they bought several excavators. But they also rebuilt three excavators they already had. “And when they go out of our new shop, those machines, whether it’s the tracks, the engines, the pumps or the cabs, they’re almost as good as new.” In terms of equipment, they try to maintain continuity, whether it’s in getting out to the woods in a crew boat, or loading up the logs. “We try to select one type and standardize on it. It makes sense when you are stocking the parts shelves,” says Eric. For getting out to the work site, they have mostly Ford pick-ups, and also use Argo crew boats powered by Volvo engines.

In the woods, they favour Hitachi-Deere equipment for the harvesting, while Caterpillar gets the nod for pieces such as loaders. On the trucking side, their 35 units include Pacific P16s, as well as a number of old reliable Hayes units.

 

 

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