Features Mills Sawmilling
Small-Scale Success

It began when 21-year-old Peter Freymond, a Swiss immigrant, recognized that the highest yield from his farmland was coming from the sale of lumber, and began to focus on trees full time. He started Freymond Lumber in 1946, and eventually purchased the C.W. Bierworth and Sons sawmill, started in 1915 and one of the oldest established mills in the North Hastings area of central Ontario. The mill’s current site, established in 1956, is located southeast of the town of Bancroft, approximately 200 kilometres west of Ottawa.

Since purchasing the mill’s current site, the company has seen three major expansion projects as part of its operation. The company underwent its first major expansion in 1982 when Freymond constructed the present mill. In 1990, Freymond invested in a major equipment upgrade, becoming one of the first sawmills in Ontario to operate using thin kerf circular sawmill equipment. That, combined with the purchase of a bulledger, allowed Freymond to begin cutting smaller lengths of wood. As a result of the purchase, Freymond could now process logs four to 35 inches in diameter and eight to 18 feet long. That resulted in a 200% increase in output. The final expansion, in 1995, was the establishment of its chipping plant. Freymond decided to purchase a Nicholson 35-inch debarker to feed into a 72-inch Morbark chipper in order to provide the necessary chipping capacity. With the Morbark unit only able to handle wood at a maximum width of 21 inches, Freymond also got a Serco 8000 clam loader, which allowed them to split larger wood widths into manageable sizes for the chipper.

As a result of the three operational expansions to its Bancroft facility, the mill is now able to handle both the softwood and hardwood species found in the area, at all adult-growth lengths, as well as pulp loads and wood chips. Having that capacity has allowed Freymond to meet the needs of its customers, which has been the key to the sawmill’s survival.

“We are constantly having to change the products we offer. Different types of logs, different lengths of cut, and different sizes of stacks,” says vice-president Lou Freymond. “To keep our customer base, we’re constantly making whatever adjustments are necessary.”

The ability to make adjustments to accommodate the needs of customers has been made more complex by a change in the wood species being offered by Freymond. During the early days of Freymond Lumber, wood production was focused primarily on softwood products. The supply from local woodlot owners, as well as the trees found on lands owned by Freymond, meant that pine and spruce stems that were 20 feet or longer and upwards of 36 inches in diameter were the primary cuts for the company.

As Freymond Lumber has evolved during its 60 years in business, the focus of its logging has transitioned from softwoods to hardwoods. With 60% of its logs coming from private woodlots in and around North Hastings, and the other 40% coming from Crown lands, vast supplies of pine forests have given way to an increase in the supply of poplar, #2 maple and #2 oak. This has meant that the company now produces about 70% hardwood and 30% softwood.

Chipping has its Challenges
When the chipping operation was established in 1995, it was done so to provide chip wood for the pulp and paper industry. It was a natural fit for Freymond, which was already facing challenges in getting to the stems needed for CTL wood products.

“There is so much pulp in the woods,” says Freymond. “In order for us to get the 20% saw logs in the woods, we have to bring in equipment to collect the 80% pulp wood.”

The primary client was the GP Flukeboard plant in Bancroft, a Canadian manufacturer of composite wood panels. GP Flukeboard provided Freymond with an outlet for its thinnings as well as for some lower grade pulpwood. That allowed Freymond to take full advantage of all of the wood coming from its sites, both private and Crown, and maximize the dollars it was getting from each cut.

Then in May 2003, GP Flukeboard closed its plant in Bancroft, creating an economic ripple in the community that saw the loss of 100 jobs and put a severe dent in the forestry business in the surrounding area. On top of that, the decline in the pulp and paper industry, both in Ontario and across Canada, made the loss of business from GP Flukeboard that much more significant on Freymond’s bottom line.

“The chip market is down because of the loss of pulp and paper opportunities, especially in Ontario,” says Freymond. “The market just isn’t there. It’s pretty tough. We’re able to survive, but not like we used to. But we count our blessings because a lot of operations like ours haven’t been able to survive over the years.”

That ability to survive meant scrambling to find new customers for its pulp wood and chips. But Freymond Lumber was able to secure a new customer base in nearby Quebec. That has added the challenge of factoring in freight costs to the bottom line of the business model for pulp wood and chip production, but has allowed management to keep that end of the business alive. With the sales to the customers in Quebec, and smaller customers in Ontario, Freymond has been able to sell at or near the 90,000 tons produced during the original installation of the chipping plant in 1995.

Looking Forward
Freymond Lumber continues to try to find ways to both sustain and consistently grow their business. At the mill site in Bancroft, the company has begun involving voice automation to create efficiencies for its operators.

“It helps the operators to know what length of wood is being processed,” says Freymond. “That allows us to streamline the rest of the cutting line, as well as create higher efficiency stacking procedures at the end of the line. It’s those smaller efficiencies that help both our workers and our bottom line; that’s what allows us to compete.” 

There is also a degree of optimism that the growth of the demand for woody biomass could also help stabilize the customer base of the pulp wood and chips, as well as provide some energy alternatives to the company. While Freymond and his colleagues recognize those opportunities are currently in their infancy, they are taking the necessary steps to understand what might be available to them.

“We’re exploring opportunities to use chips and pulp wood for power generation,” says Freymond. “But right now, we’re only in the investigation phase, looking to see what’s available.”

According to Freymond, the difficulty with the biomass energy-generation market in Ontario is cost, as the financial model for biomass doesn’t currently exist. Other types of renewable energy, such as wind and solar, are subsidized under the Ontario Feed-in-Tariff or FIT program, with energy generation bought back by the province for as much as 71.3 cents per kilowatt as compared to a maximum of 13.8 cents per kilowatt for biomass-produced energy. Also, it is tougher for biomass projects to get on the electricity grid as compared to other energy solutions.

As much as the development of a sustainable model for biomass-based energy production would help businesses like Freymond Lumber create a more sustainable business model of their own moving forward, it may not be the greatest financial challenge facing wood markets in Ontario.

“What’s really hurting us right now is the high cost of producing in Ontario compared to everywhere else,” says Freymond.

“We can’t compete with British Columbia, Alberta and Quebec. And it’s because those provinces have industries that are subsidized. We’re not really getting any help that way. We can’t produce wood at the price that some guys in those provinces are selling it at.”

That will be a very difficult challenge for all Ontario wood producers to overcome. But if the past 60 years are any indication, Freymond Lumber will continue to find ways to keep its own niche in the national wood products market.