Kinzua Finds a Future In Small Logs

Oregon mill uses technology and innovative fiber production ideas to secure their future

By Bob Bruce

Adapt to survive — that’s the name of the game in the timber business these days. Gone are the days when a mill could count on a steady supply of high-grade Douglas fir combined with a high profit margin marketplace. One Oregon mill that has discovered a unique formula for success in the new and changing lumber products landscape is Kinzua Resources, with main offices in Eugene, Ore. and their mill in Pilot Rock, Ore. (about 10 miles south of Pendleton). By taking the capability ties of the newest generation of computer-automated log scanning and form-following small log sawing systems — specifically the McGehee SL2000 — and closely coupling that technology with an innovative fiber production scheme developed by Potlatch, Kinzua plans to within a year and a half be processing and marketing 40 million bd. ft. of fast-growth, high-grade hybrid poplar each year, year-round, with a steady market composed primarily of the furniture industry.

Making Plans The Pilot Rock mill sits on the high plains of Eastern Oregon at the northern edge of the Umatilla National Forest. Fifty years ago when the mill opened, timber was plentiful and the market for dimension lumber was strong and profitable. When Frontier Resources purchased Kinzua about six years ago, one of their first goals was to determine the best methods and procedures for upgrading the mill’s capabilities such that it would profitably survive at least another 50 years. The key was to find a solution that would enable the mill to address not only traditional lengths and diameters of Douglas fir and pine softwoods for dimension and common lumber, but to also more effectively utilize the growing percentage of small-diameter logs that were becoming available. At about the same time, some 40 miles west of the Kinzua mill, in Board-man, Ore., Potlatch Corporation was looking at 17,000 acres of irrigated cropland they had re-engineered and replanted into 2300-acre plots of fast-growing hybrid poplar on a seven-year rotation, and wondering what to do for a Plan B. Plan A had been to grow and harvest the fiber for pulp, but then pulp chip prices took a nosedive in the mid-1990s, causing a large number of pulp paper mills to go out of business. When prices came back up again on pulp, logging companies found it profitable to pull more pulp out of the forest rather than let it go to waste in slash piles, and Potlatch’s farm-grown, higher-cost to produce chips were suddenly not as economically viable as they had once been.

Hybrid poplar at the Potlatch tree farm in Boardman, Oregon is harvested after only 10 growing seasons.

Right Place at the Right Time
It was serendipity. At the same time that Potlatch was sending out feelers in the wood products industry to see if there might be a market beyond pulp chips for their hybrid farm-grown poplars, Kinzua’s new owner, Greg Demers, was looking for ways to move the mill away from a dependence on long, fat logs and toward a more adaptable, market-driven use of small logs, and not necessarily the traditional fir, pine, and hemlock mix. According to Bill Woodfin, General Manager of Kinzua’s Pilot Rock mill, Demers and his team came up with a list of 10 key criteria they wanted their new piece of small log processing equipment to address, including such issues as improving recovery, increasing production, overall flexibility, manpower requirements to operate and maintain, and others.

Right Machine for the Job
While acknowledging there is no such thing as a perfect piece of equipment that will meet all the needs of all customers, Woodfin noted that the McGehee SL2000 “hit maybe seven out of 10 of our requirements, while the others they looked at hit only five. We gave up a few of the items on our wish list perhaps, but we gained much more. It does exactly what we need it to do.” One prime example of what Kinzua gained by going to the SL2000 is in the area of recovery. With the traditional head rig and carriage setup, logs had to be generally straight and uniform to be useful. “We like to make 85 percent of our pine in optimum lengths of 14-foot and 16-foot, but when you get to more than 15 percent in 12-foot, 10-foot, and 8-foot lengths, then you have to start giving discounts on your product price,” says Woodfin. As a result, any log with a crook or bend would have to be bucked to the longest straight section, turning a 16-foot log into perhaps a 12-foot log, and lowering profitability. The SL2000, however, is a dynamic form-following head which uses computer guidance to follow the profile of the log. Kinzua can now take that 16-foot banana and cut it into 16foot dimension lumber. And it is all high quality lumber. “With the SL2000 you’re not cutting across the grain. We keep the heart wood in one piece and the rest is all in spring and summer wood,” says Woodfin. It’s not unusual for the pieces coming out of the cutting head to look kind of strange sometimes — even ugly to be honest — but because the grain actually runs straight, the board soon pulls itself flat as it dries. “It has maintained the same quality product while letting us use a lower quality raw material to achieve that,” Woodfin says. “Before, we would have left it on-site or cut it into smaller pieces.”

With the equipment upgrades installed at the Pilot Rock mill, a unit of dimension lumber can be produced at a 33 percent savings in time and cost compared to before. Shown is plant General Manager Bill Woodfin.

Finding Flexibility
The other key benefit Kinzua has realized with their new SL2000 system is that because of its sophisticated profile-scanning front end and computer-controlled saw head, the production line can almost instantaneously change setups to produce different product lines according to market demand. With a simple program change, the system can switch from producing dimension lumber (with an operator-con-trolled percentage of wane), to glulam stock, to common lumber. “The great thing is that it gives us the flexibility to make any number of product lines and sizes, all controlled by computer,” says Woodfin. By putting the SL2000 in place, the mill becomes a two-sided operation, with 8-foot to 16-foot pine being milled on the “big” side and 8-foot to 10-foot hardwood, as well as small-diameter softwood, on the “small” side. Logs headed for the SL2000 are first loaded into a new debarker that the mill had to add in order to keep up a high enough volume of infeed material for the cutting head. “It’s a hungry animal, it eats a lot of them little logs,” says Woodfin.

Preparing for the Future
That speed and efficiency is going to be critical to Kinzua’s continued success when, in another year and a half when the Potlatch poplar farm comes into full saw log production, the mill ramps up the small side of the operation to their projected of raw material. target of 40 million bd. ft. per year of high-grade dimension lumber for the furniture industry. Amazingly, the extra production volume comes at an increased labor cost of only two additional workers — one to run the SL2000 station, and one to run the new 22-inch Nicholson A5 debarker. “It all gets back to flexibility,” says Woodfin. “These days sawmilling has become so complex you need to be able to adapt to market needs. Anyone left in the business now has to be a good sawmiller or they wouldn’t have survived, and typically the only thing keeping you from being here forever is your raw material supply.” The partnership with Potlatch is one way Kinzua has discovered to address the raw material issue, with what looks to be a nearly inexhaustible supply of high quality fiber located no more than 50 miles from the mill, and ready for harvest on a continuous 11-year rotation. The flexibility issue they have solved with the SL2000. “In terms of relative numbers, [installing the SL2000] dropped our manufacturing costs by 33 percent. So for every 1,000 bd. ft. of lumber we produce out of this operation, and that includes both sides of the mill, even with adding two workers and a debarker, it dropped total manufacturing costs by one third”, says Woodfin. “That’s just scary.”

TW

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