Sawmill set for millions of dollars in upgrades

A Vancouver-based manufacturer of wood products has an ambitious plan to operate the largest single line sawmill on the coast of British Columbia.

Western Forest Products Inc. plans to invest millions of dollars to upgrade the infrastructure at its facility on Vancouver Island.

“One of the greatest challenges of this undertaking, aside from being on time, on budget and building something that works, is to continue operating the mill while rebuilding it,” said Iain Donaldson, the company’s manager of strategic planning and manufacturing.

“The mill has some key order files and key customers that we need to continue to serve during this period and there is not another facility in the company that can take on this business.”

Western Forest Products plans to invest $200 million.

According to Donaldson, the program includes investing $125 million in strategic capital and another $75 million in maintenance capital.

“Two thirds of the strategic capital is focused on business repositioning, while the remaining one-third is earmarked for cost reduction projects,” Donaldson said.

“It is anticipated that our strategic capital will generate a minimum 20 per cent return and will be funded by free cash flow from operations.”

The first step of this capital investment strategy is the $16 million upgrade of the Saltair Sawmill in Ladysmith, B.C.

The upgrade to the sawmill’s edgers, stacker and sorter will increase production by 15 per cent and decrease the per unit cost of production.

“Some of the new equipment, like the trim line, will be built in place alongside the existing trim line to be tied in during a two week shut down,” said Donaldson.

“Purchased equipment will be brought on site and staged for installation. Other components will be built on site, either in place or in a place where they can be readily installed.”

Donaldson said all the equipment contracts for the project have been tendered and awarded.

Construction contracts are currently under development and are scheduled to begin in July or August.

Construction will start with work on the sorter building, which needs to be extended to accommodate a longer sorter, as well as a new stacker and strapper.

The project includes a new stacker, sorter rebuild and extension, a new trimline and two new board edgers.

It will take about a year to complete.

Donaldson is planning to tie in the equipment and completion with a two to three week shutdown.

For the project as a whole, there will be about 12-15 workers on site undertaking the construction of components and preparing them for installation.

During the tie-ins, that number will increase to about 50 people.

The Saltair mill currently produces about 160 million board feet per year, by turning coastal mid-size logs into high value specialized products in Hemlock, Douglas fir and Western Red Cedar.

In the current mill, logs are fed through a Reducer Quad (RQ) saw, which produces boards (1”-2” thick) or cants (up to 12” thick).

The boards are then directed to the board edgers and the cants to a canter and then a gang edger. Rough boards then go to the sorter.

The mill employs about 140 people and ships product to Japan, China, North America, Europe and Australia.

Under the new process, logs will continue to go through the RQ saw, which will be replaced or rebuilt with upgraded scanning and technology.

The upgraded saw will produce boards that are up to 5” thick, which will go to the new board edgers where they will be made into Japan squares and other products the current edgers are not capable of making.

Once the upgrade is completed in the second quarter of 2013, the mill will process more than 200 million board feet per year.

Donaldson said this capital project will make Saltair the largest single line sawmill on the coast of BC. The last major capital investment at the Saltair Sawmill took place in the mid-1990s.

The mill was built in 1972.