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Oct  2003

CONTRACTOR PROFILE2

Succeeding in tough times

Alberta contractor Lyda Logging is succeeding in tough times, thanks to strategies like a stronger focus on maintenance, and having long-term employees.

By Tony Kryzanowski

Kevin Lyda, operations manager of Lyda Logging: “Our philosophy is safety is number one, and that production will follow.”

One possible way for logging contractors to weather the current unprecedented industry squeeze on profitability might be to take a look at what other contractors are doing, to see what works—and what doesn’t work—for other operations. Contractors like Alberta’s Lyda Logging Ltd seem to have found a way to succeed, despite the harsh economic times the industry is now going through. Last year, the company received awards from the Alberta Forest Products Association for logging excellence, as well as for its safety program. Lyda Logging harvests timber on the eastern slopes of the Rocky Mountains and is a long-standing contractor with Weyerhaeuser in Drayton Valley, Alberta.

Weyerhaeuser operates both a sawmill and an oriented strandboard plant in this resource community. Lyda Logging president Lawrence Lyda earned his first contract at the Drayton Valley mill in 1986, back when it was still known as Pelican Spruce Mills. He began working in the forest industry at a young age, purchasing his first skidder when he was 16. Lyda started out logging private woodlots as well as offering salvage logging services in the Edson area. Today, his company harvests between 325,000 and 350,000 cubic metres of tree length and cut-to-length (CTL) aspen and softwood annually, with an average log diameter of 14 inches.

The equipment line-up at Lyda Logging includes three John Deere skidders, including a 748 Glll (above), and Komatsu carriers equipped with Hornet and Target processing heads (right).

The company is also responsible for silvicultural site preparation on Weyerhaeuser’s Drayton Valley and Edson cutblocks, and supplements its contract income further with salvage logging on oilfield leases, right of ways, and on pipeline easements. Lawrence’s son Kevin is company operations manager, while two other sons—Dwayne and Shawn—sub-contract and operate equipment for the company. “All contractors are feeling a fairly tight pinch in terms of the cost of doing business and the rates currently available,” says Kevin Lyda. He joined the company 16 years ago after spending a year studying business management. That year of business training has really come in handy in terms of developing company operations further. “I want to build on the 30 years that my father put into this business by putting in my 30 years to diversify and grow the business, with my brothers looking after the salvage and oilfield logging end of our operations,” says Kevin.

As with other logging contractors, the current state of the forest industry is a daunting challenge for the Lyda family. But Kevin says having longer term and experienced employees is working to the company’s advantage. Many Lyda Logging employees have been around for up to 18 years, and one reason they have remained loyal is because of the company’s strong emphasis on providing a safe work environment. “Our philosophy is that safety is number one, and that production will follow,” says Kevin.

Lyda Logging’s Timberjack 850 feller buncher works to salvage timber in a burned area.

Having well-trained and productive employees provides a number of benefits during tough economic times. Example: long-term employees tend to be much more careful with equipment and more attentive to preventative maintenance. The end result is higher equipment up-time and manageable maintenance costs. Long-term employees are also generally more productive and efficient than less experienced people, meaning that companies like Lyda Logging have more wiggle room when crunch times come with logging rates. “Not all of us (contractors) have the benefit of experienced operators,” says Kevin, and there aren’t many available on the job market. As equipment becomes much more computerized and complicated, it becomes even riskier to unleash a rookie operator on a machine, not to mention the fact that it will take them a while to achieve full production.

So the first piece of advice in the survival game is to find and keep experienced employees—people who will remain loyal as long as the company provides a safe working environment with reasonable production expectations. Avoiding major capital spending is another way that contractors use to ride out tough times, and Lyda Logging is no exception. Extending equipment operating life by rebuilding from the ground up is something that company owner Lawrence Lyda has practiced for a long time. “The current situation is forcing us to hold on to iron a little longer,” says Kevin. “I don’t see Lyda updating a bunch of equipment or bringing in new equipment at this time.” The practice of rebuilding and keeping a fully stocked parts inventory has served the company well over the years, and that approach will continue.

The company operates two Timberjack 618 feller bunchers and one 850 feller buncher, with the equipment ranging in age from 1993 to 1999. It owns three John Deere skidders and one Tigercat 630B skidder. On the delimbing and processing end, Lyda Logging uses Komatsu carriers outfitted with three Hornet processing heads and one Target processing head, a Komatsu PC 200 carrier processing with a Lim-mit delimber, and a Komatsu 250 carrier with a Risley 2200 processing head. For log loading, the company employs a Komatsu PC 300-6 carrier with a shortwood clam, as well as a PC 300-5 carrier with a long wood grapple. This combination—with the emphasis on Timberjack feller bunchers, John Deere skidders, and Komatsu carriers equipped with Hornet/Target processors—has been profitable for the company.

The equipment has operated quite reliably over the years. The processors are heavy duty enough to manage both hardwood and softwood, and Lyda Logging has received excellent service support. The company requires an equipment fleet that can operate with speed and versatility because 100 per cent of its hardwood is cut-to-length, 30 per cent of its softwood is cut-to-length and 70 per cent is tree length. A number of sorts are required both in the bush and at roadside. The topography of the company’s cutblocks tends to vary from fairly steep slope to flat ground. Kevin Lyda says that over the years, the company’s Timberjack feller bunchers have proven their worth in this often challenging environment.

The bunchers, he says, were very well designed and have performed well for them. “However, having said that, I think everyone is making good equipment. It’s just that the prices are getting out of hand.” Kevin acknowledges that there is a point when equipment must be replaced, but he says the cost of new equipment is a concern industry-wide. The trend towards consolidation among equipment manufacturers, he says, has not worked in the favour of contractors. The ability to negotiate a better deal—playing on the competitive nature of the equipment industry—is certainly not there to the same degree.

On the log haul end of operations, the company recently purchased five Kenworth logging trucks as a cost control measure, and to maintain a high quality standard. When money gets tight, forest companies will tend to stick with their best contractors, but that does not necessarily mean the most loyal. Forest management practices have become much more complex over the past 15 years, and those contractors who have been most willing to embrace change stand to be among the most valued when push comes to shove.

Weyerhaeuser has initiated an Environmental Management System (EMS) for its forest management practices near Drayton Valley and all Lyda Logging employees have been EMS-trained. In fact, Kevin Lyda keeps a copy of the EMS document next to him in the truck. Clearcutting is a thing of the past, he says, and harvesting prescriptions tend to change from site to site, meaning that Lyda Logging and its employees must be adaptable. “We’re trying to target five per cent of the standing block,” says Kevin. Initially, he cordoned off areas that were intended to be left in the cutblock with ribbons, but company operators have now become adept at making their own selections based on criteria specified in the EMS manual.

Leaving a light environmental footprint is another priority within the manual. Furthermore, because the company’s forestry operations take place between the Hwy. 2 corridor and the famed Jasper National Park, its forest management practices are fairly visible to the public. It must be mindful of other forest users, and sensitive to the public’s growing concern regarding increased access to sensitive environmental areas made possible by logging roads. To that end, Lyda Logging is working with the oil and gas industry to coordinate efforts to construct and reclaim access roads to minimize environmental disturbance and restrict public access.

Lyda Logging has eagerly adopted changes to its harvesting practices that benefit the environment. Kevin says he welcomes the opportunity to help regenerate a strong and healthy forest that can be enjoyed by his children, and could possibly provide them with a livelihood some day as well. Finally, many logging contractors have taken steps toward diversification as a hedge against high operating costs in forestry operations. Lyda Logging has expanded into silvicultural services. In other words, the company has diversified its services to give itself a competitive edge. It has also developed a salvage logging service that is offered to the oil and gas industry, which in Alberta tends to overlap with forestry in many parts of the province.

Other loggers have put equipment such as dozers and graders to work in road construction, particularly at times of the year when the equipment tends to sit idle anyway due to unsuitable forest ground conditions. While it is impossible to plan for every adversity, Lyda Logging is proving that it is possible to build in a certain amount of “bulletproofing” into a logging business to remain viable even during tough times.

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