From Specialty Wood Journal, October 2008Richmond Plywood stays successful in its own unique way.
Richmond Plywood in Richmond, B.C. began in 1956 when 300 investors each paid $5,000 to establish what has become a successful plywood producing co-operative. According to President and Chairman of the Board, Sukhwinder (Sandy) Grewal, ongoing investments are what continue to secure Richply’s success in a so-called sunset industry.
“Investments in plant and process, together with reliable management and product flexibility, enable Richply to prosper where many have failed”, said Grewal.
Grewal believes strongly in Richply’s management philosophy. “The Board of Directors may change regularly, but our management remains stable and consistent”, he said, adding that there are several 20-plus year employees in key positions throughout the company.
According to Grewal, part of ensuring the company’s success lies in securing future ownership. “We need to be sure that our shares retain their value so they are attractive to potential buyers. Proper management and investment has enabled us to do this and attract new owners as the existing ones retire.” This strategy appears to be working. Today, shares are valued at $300,000 each.
A 30-year veteran of the wood products industry, Grewal joined Richply in 1984 when he bought a share for $45,000 and started work as a core layer on the spreaders. Today, the certified steam engineer carries out his maintenance duties in the steam plant in the mornings and his duties as Chairman of the Board after lunch. It is an unusual arrangement, admitted Grewal, but one that works. “We all pull our weight and contribute here”, he stated.
Richply’s 282 owners all have equal voting rights when electing the seven board mem- bers and all shareholders earn the same wage rate. “The President and the sweeper get the same rate of pay”, said Grewal, a board member for 12 years and now serving his seventh term as Chairman. Richply’s total workforce numbers over 400.
As to the present situation in the industry, Richply’s owners remain positive. Said Gre- wal, “We are here making plywood every day, investing in our business to ensure our future. As our anniversary slogan states, we are moving towards 100 years and beyond.”
Experienced and stable management
Richply’s General Manager, Doug Scott started at Richply in 1994. He likes to add the letters M.B.L. after his name -Management By Luck - but luck has little to do with Richply’s success. According to Scott, key factors are consistency and continuity, both in the way the mill is run and how products are made. Richply management constantly re-evaluates its performance and makes improvements through capital investments, like a new dryer, or through smaller investments, like upgrading software or rebuilding a press.
As a member of the team responsible for equipment purchasing decisions, Scott believes in establishing good vendor relations. He stated that local machinery manufacturer, Raute Canada, has a successful track record with Richply. “We have co-operated with Raute in developing products, such as a clipper scanner, rotary clipper controller and dryer speed control, among others.”
He also noted that, while having Raute’s factory nearby is advantageous, the vendor must perform to Richply’s expectations. The 2005 dryer project helped build strong relations between the two companies, he said. “Raute’s 6-deck dryer has outperformed its design capacity and veneer quality is consis- tent and good. It has also proven to be an energy-efficient and reliable performer.”
Successful upgrade projects from Raute
In recent years, Raute has delivered numerous capital and modernization projects to
Richply. These include a 6-deck dryer system incorporating a multi-bin dry veneer stacker and VDA camera grading system, as well as the infeed, outfeed and controls supplied by Raute when Richply rebuilt their #2 dryer. New high-speed sheet refeeders were also added to the dryers.
More recently, Raute installed hydraulic clipping trash gates on the two 8 ft. lathes, as well as a Smart Scan XY block optimization system on #1 lathe and a Smart Scan XY including a block charging system on #2 line. Peeling line #2 also benefited from the installation of a new-style Raute sheet diverter and 5-bin Raute green stacker in 2001.
Outdated VME lathe controls were replaced with ControlLogix PLC controls, which provided open-architecture program- ming and have simplified trouble-shooting. New controls were also added to #2 green stacker, as well as Raute VCA clipper scan- ners and Raute rotary clipper controllers on both lines.
“It is still early days for the new XY’s”, stated Scott, “however, we are already seeing improvements in full-sheet recovery and a reduction in random.” Other recent projects include the installation of saw line feeders and a multi-bin panel stacker for the sanding line.
Green commitment
Richply is firmly committed to the environment. Occupying 25 acres in Richmond, an urban district near Vancouver, the mill is under the scrutiny of the Greater Vancouver Regional District (GVRD).
The first of several important environmental projects undertaken recently, Richply’s proposal for the 6-deck Raute dryer project exceeded the GVRD’s requirements and impressed them so much that they granted the permit in two weeks.
“We told the GVRD that the Raute dryer would replace three existing old dryers and that we would tie the remaining two dryers into the new precipitator. This was not required, but they saw it as a very proactive approach to eliminating blue haze and reducing particulate”, said Doug Scott.
Another major project was the steam plant started up recently. In 2007, the mill spent $2.6 million on the cost of gas. A study showed that by converting from gas to steam and using bark and residuals as fuel, long-term savings would be significant and environmental impact would be very positive.
The ROI analysis was based on Richply paying the bank $3 million a year over five years, or the gas company about the same amount every year forever. Given the ever- rising cost of energy, the proposal made sense and was readily accepted by Richply’s board. The mill’s gas bill for July this year was a meager $9,000.
Sales driven
Improvements to its production process have boosted Richply’s output from 160 MM3/8 annually a decade ago to an expected 240 MM3/8 in 2008. Management believes that their broad product mix, supported by successful modernization projects, has enabled Richply to sell successfully and so meet its obligation to the shareholders.
“Richply has hundreds of products and is not dependent on the structural panel market, nor does it compete head-on with OSB. If we did, we’d be hurting now, considering that this is the worst market I have experienced in 35 years”, stated Terry Davis, VP of Sales and Marketing.
“When I joined Richply we had two old lathes and we had to buy a lot of veneer. After putting in a newer lathe and shutting down one of the old ones, we are self-sufficient and have quit buying veneer,” he added.
Davis added that camera grading and stacking has given management the confidence that all veneer is graded properly. That, together with upgrades to the lathe and the revamping of the dry end, has enabled Richply to produce veneer for sales on the open market. SWJ
Wellons steam plant project
Wellons is recognized as Canada’s leader in the design, fabrication and installation of complete wood-fired thermal oil and heating systems for the wood indus- try. In 2007 they contracted with Richply to supply a steam plant that uses bark, dust, hog fuel and trim waste to supply the heating needs of the mill, enabling it to eliminate its reliance on gas. This turnkey project encom- passed fuel handling through to the exhaust stack and included foundations, buildings and installation.
According to Technical Sales Represen- tative Paul Rossi, the Richply project was challenging due to the tight confines of the site and the high salt content of the bark.
“Richply’s logs dwell in the delta of the Fraser River. The high salt content means that the bark has to be mixed with other wood furnish to make it resistive to plugging up the precipitator,” he said.
The electro-static precipitator (ESP) works by attracting ash particulate to electrically-charged plates, which is then knocked off the plates and collected. Particulate heavy with salt collects on the plates, clogging the system.
“During due diligence we sent furnish samples to a lab in Kentucky for analysis. The combustion material was carefully analyzed and the proper solution put in front of Richply management”, said Rossi.
Fuel enters the steam plant is placed in metering bins. It is then fed by feed screw into a Wellons combustion cell, which can reach 2,200°F. The boiler is heated and the steam distributed throughout the plant in a close-looped system. Make-up water is drawn from the existing RO plant.
“Wellons had a viable solution for Richply and satisfied the GVRD’s requirement for particulate emission of 20 mgrams/standard cubic metre. A successful project,” added Rossi.
For a visit to Richply now, watch our video interview with Manjit Sihota, current President of the company.
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