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Diversifying its operation

Doing more with what we’ve got. That’s the philosophy that Robert Taylor, president of Taylor Lumber Company Limited of Middle Musquodoboit, N.S., uses to run his operation.

This philosophy has provided a solid business strategy that has seen the company continually grow the efficiency of its operation since its humble beginnings nearly 70 years ago.

Frank and Connie Taylor started Taylor Lumber in 1945 with just three employees. The original mill was located about five kilometres from its current location in Middle Musquodoboit, approximately 75 kilometres northeast of Halifax. Frank’s sons, Robert, Roy and Brent, eventually took over the reins of Taylor Lumber from their father. Robert, president, who began working at the family business as a teenager before attending university, has led the business to where it is. Today, he has three of his own children working full time and one working part time with the company, in different capacities making them the third generation involved in the family business.

Producing quality wood
Taylor Lumber has always focused on the quality of the wood produced in its sawmill. Regardless of the economic conditions facing its customers and the industry, it has been the company’s mandate to always produce a high-quality product for the consumer.

“We make a top-notch product that we can get top dollar for,” says Taylor, who believes that the company’s reputation as a producer of high-quality timber products has allowed it to command strong prices, even when lumber markets have been weak.

Even though producing a large quantity of wood is an appealing option for the operation, mass production is not always the answer. Taylor doesn’t believe you can keep a business strong during slow times unless the quality is there.

“Quantity is a great thing if everything is stable and the dollar is such that you can still sell without being penalized, and the markets are good,” says Taylor. “But what happens when the markets go bad? You have to rely on that product that you are making and hope that people are going to want it and be willing to pay more for it, even when the markets are down.”

One of the many reasons Taylor Lumber is able to provide a high-quality product, is that the operation has forged strong business relationships with independent logging contractors throughout the region, as well as with the Pulp Mills that exist in the province.

These strong relationships have a lot to do with the scope of its production facility. For example, Taylor Lumber’s chip plant allows the company to buy pulpwood from local suppliers. This in turn helps provide a supply of high-quality spruce logs from these suppliers for wood products.

“It enables us to go to our log suppliers, the ordinary guys who go out and cut a couple of loads of logs, and take not just his logs, like I did in the past, but now I can take his pulp wood. So now it’s one-stop shopping for them,” said Taylor. “We also purchase FSC Certified and Control wood.”

Making the cut
The saw log operation remains the core of Taylor Lumber’s business, despite adding pallet production and chipping operations to the business. Depending on volume and demand, Taylor Lumber produces between 12 and 18 million board feet per year.

Once the saw logs are delivered to the mill, they are sorted by a Liebherr 934 and loaded into bins for sawmill production. The logs are sent through a Valon Kone rotor debarkers before being sorted further to one of the two lines in the sawmill: one for small logs and one for large logs. Twin saws and head saws used in the saw lines were developed and customized in-house. That customization includes a Valley edging system, which allows for swift transition in producing different products without creating downtime.

The newest addition to the Taylor sawmill is a Newnes trimming system from USNR, which is helping Taylor meet the high standards for the wood products it produces.

“Once the log goes into the mill, it is sawn, then dried, then finished. If it doesn’t make  No. 1 grade lumber, it can be modified in the new trim system, by being remanufactured. Sometimes it might mean taking two feet off the end of the stick. If it can be put in a machine that is going to take that two feet off the end, put it into another pile, reducing it from say 12 feet to 10 feet but still a merchantable stick, then that’s called recovery.”

The wheel, a unique system developed at Taylor Lumber, is a large circular conveyor system surrounded by multiple piles of wood. With different board lengths coming out of the sawmill at any given moment, the wheel provides the versatility to stack multiple lengths at the same time at different locations around the wheel. The bundles are then taken away by Sellick forklifts to be dried in Brunner Hildebrand dry kilns. A percentage of the lumber sold by Taylor is FSC certified.

The byproducts from the sawmill and chip plant are then used for the company’s biomass cogeneration facility, which has been operational for over 25 years.

The waste wood, which consists of bark, sawdust and shavings from the operations, is conveyed to the power plant via a BM&M screening system. The cogeneration plant consists of different components, some of which are a KMW burning system, a Superior boiler and an Elliot turbine. The facility produces enough power from waste wood to power Taylor’s entire operation and supply power to a 30-square-kilometres radius in the surrounding community. Taylor is the first privately owned sawmill operation to sell power to the Nova Scotia Power Utility. The ash, which is also a byproduct of the burning system, is then sold to local farmers for feedstock.

 Taylor’s newest project is utilizing the waste heat that comes from circulated hot water in the power generation process. The water travels from the power plant to the cooling pond, where it is atomized for cooling. Approximately 2200 gallons (roughly 8327 litres) of water is used per minute as part of the process. The heat from the hot water is currently going to the atmosphere, but Taylor recognizes that there could be a solution for using the waste heat.

“We are currently looking at the potential for four acres of greenhouses on our current site,” said Taylor. “Those greenhouses would allow us to bring product (vegetables) to the market at times of highest demand, which would be a good added value for us if the cost of operating greenhouses makes sense.”

Facing numerous challenges
Despite having an operation that makes the most of every ounce of wood that enters its facility, Taylor still has challenges that have, at times, been difficult to overcome.

At this point, the greatest issues facing Taylor Lumber are obtaining a reliable wood supply and paying the steep stumpage fees the province requires. The provincial stumpage fees in Nova Scotia, some of the highest in the country, make it difficult to compete with the west.

“Our stumpage here is much higher than anywhere else,” says Taylor. “We’re paying anywhere from $28.81 per ton for stumpage fees, while places like B.C. are paying $0.50. It’s too bad all provinces couldn’t work together. We need a level playing if we are going to compete successfully.”

The fees have had a significant impact on lumber markets that are often changing for Taylor Lumber. The volatility of the U.S. dollar has also been a major factor in where its lumber is sold.

Though during the past 30 years Taylor has seen its lumber sold worldwide, new markets have opened in places like Iraq, Israel and Dubai. Those tough-to-access markets were breached by chance; Taylor says that there was a lack of support from Export Development Canada (EDC). With the rise of the U.S. dollar to around par with the Canadian dollar, many of those international markets have disappeared, based largely on the fact that shipping costs to the international markets are calculated in U.S. dollars.

The loss of those international markets has forced Taylor to look nationally to sell his high-grade lumber products.

“This is the first year, in many years, that we can say that 100 per cent of our wood is being sold in Canada,” says Taylor. “And no further than Ontario, with nothing into the United States.  Of that, about 60 per cent is staying within Nova Scotia.”

Despite the challenges of changing markets and rising costs, Taylor has been able to weather the storm, thanks to, for the most part, the strength of his staff. Many of them are people who looked at opportunities in the west, but instead, decided to stay and work at Taylor Lumber, which employs over 100 people.

“A lot of people go out west now,” says Taylor. “But if the people here can get a job that’s sustainable in this area, an area they were brought up in, a lot of them will stay.”

Taylor also has given his staff plenty of reason to stay. He frequently approaches members of the staff to discuss opportunities for growth within the company, often paying people to go back to school in order to upgrade their skills or certification.

Taylor and the next generation of his family, who are now taking an active role in the operation, realize that having the reliable staff they have allows them to make the high-quality wood product that in turn allows them to have a solid reputation in the wood products business.

“A company is only as good as the people who work in it.”

August 13, 2013  By Andrew Macklin