Building taller: BC mass timber suppliers see surging sales in Canada, US
November 7, 2019 By Jean Sorensen
As the B.C. commodity lumber sector shutters mills, the B.C. value-added sector serving mass timber construction is surging forward with sales buoyed by a strong U.S. economy clamouring for new buildings and optimism over changes in Canada’s 2020 National Building Code.
B.C. is an early-adopter of the draft of the new 2020 National Building Code, which lands encapsulated mass timber construction (mass timbers that are encapsulated in fire resistant material) into the mid-rise construction market. The new Canadian code allows wood buildings up to 12 storeys and provides guidelines for the tall buildings trend unfolding in B.C., Quebec, and Ontario. U.S. states have also actively been changing building codes to allow more mass timber buildings.
The Canadian Wood Council’s program Wood Works! cites that, as of March 2019, 545 multi-family, commercial, or institutional projects have been constructed out of mass timber or are in design in the U.S. Sonya Fletcher, vice-president of market development for Forest Innovation Investment, says it’s early days yet in terms of market statistics on mass timber, but the U.S. numbers are a “solid indicator” as the trend deepens.
The 2020 code change is a marked divergence from the existing code, which fostered six-storey wood, light frame wood construction. Mass timbers are panel products manufactured for strength and continue the trend of pre-fabrication in construction. The large-scale panels expedite the construction process as the made-in-plant panels can be trucked to site and craned into place for quick assembly of roofs, walls, and floors.
Kiln-dried wood is used for panels such as cross-laminated timber (CLT), nail-laminated timber (NLT), heavy timber decking (3x or 4x boards), and traditional post and beam framing. Products such as dowel-laminated timber (DLT) and mass plywood panels (MPP) are new entrants on the market.
There are three existing Canadian CLT manufacturers: Nordic Structures and Element5 Co. in Quebec and Structurlam in B.C.’s Interior, which will soon be joined by Kootenay-based Kalesnikoff Lumber’s new $35-million plant in early 2020. In November 2017, StructureCraft Builders Inc., a 21-year-old company known for providing custom wood features to buildings, opened a new 50,000 square foot plant in Abbotsford. The plant is divided in two; half producing custom work and the other half providing Canada’s first DLT panels.
DLT differs from NLT and CLT in that it is formed by placing two-inch dimensional lumber on edge and pressuring dowels through it. Gerald Epp Jr., son of the StructureCraft Builders plant founder, says the moisture content of the dowels is lower than that of the kiln-dried dimensional lumber and as moisture seeps into the dowel, expansion occurs, tightening the join.
B.C. also has a number of glulam manufacturers as well as companies that import glulams and CLT for detailing using CNC guided equipment. Glulams from B.C.’s Spearhead Kootenay plant are being used in Vancouver’s Terrace House, which is now under construction in downtown Vancouver. The 19-storey structure with a 12-storey concrete podium is topped by seven floors of glass and exposed glulam timbers. This type of hybrid and exposed wood construction is new to North America.
Brian Hawrysh, CEO of the BC Wood Specialties Group, says interest in mass timber construction has prompted several other value-added companies to move into mass timber. “They are looking at it and considering their options,” he says.
Hawrysh says he is not aware of any of the major commodity lumber producers opting in. Their business profile differs, he says, adding that ultimately it is a win-win situation for them as mass timber opens up a new market for dimensional lumber.
Instead, companies entering the mass timber space are intermediate value-added manufacturers, such as Kalesnikoff. “They are in the value-added game already and are looking at ways to stay competitive and to differentiate themselves from the big boys as they go into a new product line,” he says.
The unshackling of code restrictions both in the U.S. and Canada is a result of these new engineered wood product technologies and social changes in urban centres.
“There are different social drivers than there were 50 years ago,” Hawrysh says, as urban centres are no longer single-family housing markets because of land costs, changing attitudes towards home and car ownership, rapid transit development, and gas prices. Such drivers push forward multi-family residential buildings as urban densification increases and developers are looking towards more prefabrication, such as mass timber construction, as a way of down-shifting borrowing costs and getting buyers or tenants into buildings faster.
The rebounding U.S. economy is also spurring demand for new office space and infrastructure buildings.
Structurlam is riding the crest of the mass timber boom wave on both sides of the border. “The National Building Code will really remove barriers to sales,” says Stephen Tolnai, vice-president of sales and marketing. “Codes do help companies sell a lot easier and there is less risk for the developer to take.”
Structurlam sales are 50-50 between Canada and the U.S., but Tolnai is well aware of the awakening potential in the U.S. “We see sales [in the U.S.] growing at 25 per cent a year,” he says. The company has sales offices in Portland, Sacramento, Long Beach, and Austin, and is planning another outlet in Washington State. “We have by far the most sales offices in North America,” Tolnai says, adding that future expansion plans do not rule out building a manufacturing plant in the U.S. within the next five years.
On the home front, Structurlam’s recent plant expansion will carry its Penticton, B.C., operations forward for the next couple of years, Tolnai says. But if market growth continues on both sides of the border, the plant may be expanded again to capture that new business.
U.S. developers are coming to B.C. companies to one-stop shop, Tolnai says. B.C. is known for building in wood and has a retinue of architects, structural engineers, manufacturers and fabricators who can provide the needed expertise and components. Companies such as Structurlam are part of that process by working with that design community.
StructureCraft positions itself as an engineering, design, fabrication and installation or turn-key operation, Epp says. Adding the DLT plant provided the company its own product while offering clients a range of profiles with panels up to eight foot by 60 foot.
While the plant has only been operational for 18 months, DLT acceptance remains strong. “I would say it took off reasonably fast and gained a share of the market. Architects like the aesthetics and profile options,” Epp says.
Business is split 50-50 between Canada and the U.S. “In the U.S. and Canada, they are building taller buildings (of wood) and there are improvements to the codes so I see construction increasing,” Epp says. Like others, he anticipates the U.S. market will grow faster, although he has no company projections. StructureCraft recently provided DLT panels for the Museum of Fine Arts in Houston, Tex., plus two office buildings, including a seven-storey structure in Atlanta, Ga., using 200,000 square feet of DLT for its roof and floors.
Epp says the company’s new plant currently is able to handle demand, but as the market quickens, it may have to be revisited. “We will be analyzing our demands over the next few years to determine our needs,” he says. The plant will remain balanced between custom work and DLT production.
Code changes are a game-changer for Edmonton-based Western Archrib, a 60-year-old company. “There is a wood Renaissance occurring and we are seeing more tall wood buildings,” says business development manager Andre Lema. High-profile projects such as Grandview Aquatics (532,000 lbs of glulams for the roof were manufactured by Western Archrib with Seagate Structures completing the roof in 12 days) and UBC’s Brock Commons (considered the world’s tallest wood structure until recently) have pushed the envelope and renewed the interest in wood in general, he says.
The company manufactures glulams but also its own product line Westlam beams, a proprietary product with added strength. The new Canadian building code will open more doors to use the company’s product in multi-storey residential structures, adding another layer to the market place as glulams continue to be used in non-residential structures on both sides of the border. “The challenge is getting our heads and those of our engineering staff focused on a new type of construction,” Lema says.
The company has two plants: one in Edmonton near the head office and a second production plant in Boissevain, Man., close to the border, serving the U.S. market, where 25 per cent of company sales are derived. Lema estimates that sales, riding on emerging demand, will increase approximately 50 per cent as U.S. and Canadian demand is driven by code changes. The company is looking at increasing its CNC equipment and will continue to add as the market demands, he says.
“Our product is supporting a lot of CLT,” Lema says.
The Kalesnikoff 110,000-square foot CLT facility coming on stream in 2020 will market into three prime areas: Western Canada, the U.S. and globally. European equipment is being supplied by companies such as Denmark-based Kallesoe Machinery A/S, which is supplying all the high-frequency presses, while the finger-joint machine is from Canadian-based Conception R.P. Inc., in Quebec.
The new plant, which has a capacity of 50,000 cubic metres of product over two full shifts, is able to produce 60×12 foot CLT panels that are 13 inches thick, and 60-foot long glulam beams with a width of 12 inches and a 54-inch depth.
Ralph Austin, president of Seagate, the go-to company for mass timber installation, stick-handled the Brock Commons building. A long-time veteran of the construction industry, he’s more cautious of the Canadian market than the U.S., which is unfolding rapidly as wood gains acceptance there. He now has an office in Bellingham, Wash. “I get 10 times more phone calls from the U.S. than in Canada,” Austin says. His plant in Chilliwack, B.C., not only prefabs light frames but also sources CLT and fabricates for the installation. In the U.S., he says, “Office buildings are a big source of work.”
Austin expects in a few years most of the revenue will come from the U.S. Canada appears to be a slower developing market. “Projects take longer to get off the ground,” he says.
There exists a conservative element in the private development industry, which wants to ensure new concepts will be economically viable. It wasn’t until 2017 that mass timbers were mixed with light frame to prove hybrid six-storey wood commercial residential buildings were a faster build-out for developers.
Austin said the larger developers have not jumped onto the mass timber trend, but even so he is skeptical there would be enough B.C. mass timber available to supply such demand and U.S. demand. Currently, his plant is sourcing CLT from Europe at competitive prices as there is an over-supply from that continent’s 20 producers.
Will he expand the Chilliwack plant? He’s not yet sure, but will be observing how markets unfold and how best to serve clients.
FraserWood in Squamish, B.C., is involved in the periphery of mass timber as a remanufacturer of glulams targeting the high-end residential market, according to its owner Peter Dickson. “Our business is to grow in that field,” says Dickson, adding he’s not venturing into competition with “the big boys” in the CLT business.
Dickson’s operation employs 35-40 people in a 60,000 square-foot plant. “We are the smallest of the big guys or the largest of the little guys,” he says. The questions Dickson ponders is how big does he want to grow his glulam niche and where to find staff with the computer skills to work in-house fabricating according to design.
“To me the big challenge is the lack of trained CAD people. Everything is computers now,” he says. But despite an emergence of computer skills in schools and business, it is difficult to find trained staff able to handle computer generated designs, which are the mainstay of CNC equipment in prefab or remanufacturing facilities.
The 2020 building code will impact both Dickson’s Canadian and U.S. business, which over the past 20 years has been solid. “We have always had 30-50 per cent of our business in the U.S., but more on the residential side,” Dickson says.
Parallam PSL beams are also benefiting from the uptick in mass timber construction on both sides of the border. The product, originally debuted by MacMillan Bloedel at Expo 86, is now produced at Weyerhaeuser’s Annacis Island plant for the Western seaboard. The product was used in the UBC Brock Commons mass timber building.
“The columns on the three lower floors, where the loads are the highest, are Parallam, which was used for its strength,” says Andy Teasell, Canadian engineering and technical service manager for Weyerhaeuser. The other floors use glulam columns.
“I think B.C. particularly has been quite inspirational to designers in the U.S.,” Teasell says, adding that the U.S. cities and states have quickly adopted much of B.C.’s beam construction technology.
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