Engineering a Future
Looking beyond common sawmill-pulp mill models, Superior Laminated Lumber is trying to develop an LVL plant in northwestern Ontario that would marry bio-energy, engineered wood, and particleboard manufacturing to form a new industry model.
by Scott Jamieson
Looking at Canada’s integrated solid wood products industry, it’s easy to argue the need for some new business models. Folks in northwestern Ontario are doing just that, hoping to connect the dots between an under-utilized species, high energy costs, and an under-served market. To gain an inside perspective on that vision, CWP sat down with Mike Shusterman this past fall in Thunder Bay, ON.
Mike is the business development manager for Fibratech Inc., a particleboard manufacturing company with a plant in nearby Atikokan, ON, owned by president and former MacMillan-Bloedel executive Dan Warren. Apparently, business development at Fibratech goes beyond finding new markets for the company’s existing products.
“When Dan hired me in 2004, he wanted me to look at other things we could do, perhaps make veneer from the region’s under-valued birch to do door overlays as an example. I said maybe not high-grade veneer with the quality of birch we have here, but perhaps there was potential for a product that’s more forgiving, and with a growing market, and that’s where LVL came in.”
Mike is a former Mac-Blo panel sector employee himself, having worked in Nipigon, Wawa, and Pembroke, and says the notion of making LVL from birch has been around the region since the late ‘90s. But when Weyerhaeuser bought out Mac-Blo, the idea was shelved. It is now front and centre under the guise of a new Fibratech subsidiary called Superior Laminated Lumber (SLL).
Beyond firewood
The new model starts with the lowly birch, a local species relegated to firewood. Add to that a simple premise – If there’s no place for birch in the current integrated forest industry model, then make a new model. If the new model involves new companies, new partners, new relationships, and a new resource allocation flow, so be it.
The first step in this new model is harvesting the birch from areas around Thunder Bay (or simply collecting it, as many loggers now just leave the unloved birch standing, as we saw on several occasions during our week in the region). This mixed quality supply would be brought to a central sort yard in Fort Williams, a community adjacent to Thunder Bay. Sorting would be key, as Mike explains.
“We know there is an adequate supply of birch to feed a mid-sized LVL mill, given the new production technology already in use. We toured LVL plants in France, Finland and Latvia with Raute (an LVL machinery supplier and small-log LVL pioneer), and what we saw only reinforced that. In Latvia in particular we saw a plant making highquality LVL from birch similar to ours, so we know it’s feasible. We also plan to peel at four-feet to maximize recovery. Still, we know a good percentage of our birch will not make the cut, so our success will hinge on the ability to sort out the maximum volume of suitable material in an efficient manner. It’s similar to a Scandinavian model.”
As for cull, it will still be firewood, only now at a much grander scale. Plans call for a bio-energy plant to be built next to the Fort Williams sort yard. There, an independent company with close ties to SLL will set aside the better logs for shipment to the LVL plant in Atikoken, some two hours west. Cull will go to a co-gen plant to be established by a another separate company, Northland Energy, through a consortium that includes the Fort Williams First Nation Development Corp. Abitibi runs a pulp and paper plant in Fort Williams, and would buy the power.
“A company called Northwest Fibre Supply will manage the merchandising, and we at the LVL plant would definitely have a hand in that, as getting the quality and volume we need will be key. Still, there is opportunity for all involved, and that synergy is critical right through this project.”
The LVL logs would arrive at the SLL plant in Atikoken, ready to be scaled on the existing Fibratech scale house, an illustration of additional synergy in the project.
“The site is already developed thanks to the particleboard plant. The LVL mill will be a distinct corporate entity, but there would be an agreement to share overall site costs, like the weigh scale. Of course the water, power, roads and site itself are already developed. We have a CN Rail siding in place, allowing us access to the nearby US mid west housing market. In other words, there is no need to incur the kind of capital costs most greenfield mills endure. And, the new plant will go a long way to meeting the particleboard plant’s fibre needs, including cores. As Dan (Warren) likes to say, it’s a reverse perfect storm, in that the more we look at it, the more synergies we find.”
Plan to act
It’s a solid plan, and getting closer to action. Fibratech completed a feasibility study of everything from fibre to markets in January 2006, with positive results. A financial partner has joined the team, and as a bonus the npartner has its own expertise and market channels in LVL. Mike adds that market reaction to the idea has been positive, and that samples of local birch have been sent to the new partner to be made into LVL as a trial. The last major hurdle, he says, is getting buy-in from Ontario’s Ministry of Natural Resources (MNR) regarding fibre supply and the project’s viability.
“We are working with the MNR, but I have to admit it can be frustrating at times. The industry is full of gloom and doom, and here we have something positive that will bring benefits to a number of parties and communities, and create several new companies. We’re looking at creating or preserving some 800 highpaying jobs when you factor in logging, the sort yard, the co-gen plant, the transport and of course using the synergies to protect the 140 existing jobs in Atikoken. Yet we are fighting all the time to move forward.”
Still, Mike says there are just too many good things about this project for it to stall now that momentum has been created.
“Dan is such a visionary – he gets you to think outside the box, like we are doing with this project. He makes you believe you can create your own future, and we think we can here. It all makes just so much sense, it has to work. We’ll keep you posted.”
