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Turning a corner

Sept. 17, 2013 - Like much of the Saskatchewan forest products sector, Norsask Forest Products was a bleak place just a few years back. The company operated sporadically for several years in the worst of the lumber recession, coming back full time as a single-shift operation in March 2011, in large part to create local employment and service long-time clients.

The tide has turned, however, as fresh investments, better markets and new staff are breathing some welcome life into both the company and the communities it helps support. Norsask is currently 100 per cent First Nations owned by the Meadow Lake Tribal Council, with well over 60 per cent of its workforce drawn from the nine communities MLTC represents, as well as from other non-aligned First Nation communities.

In fact when Canadian Forest Industries was on site this past May, the company had just hired 25 new employees to help staff what mill manager Dave Neufeld calls a “hybrid” second shift. The mill hopes to move to a full second shift by Labour Day.

“Right now we have a full shift, with the second shift a hybrid where we run the sawmill and planer mill on alternate nights, with the extra sawmill staff doing plant-wide cleanup and maintenance when we are working in the planer mill.”

There are two main reasons for this phased ramp-up to two full shifts. First, the mill’s forestry arm, Mistik Management, is in its own phased ramp-up, and needs time to get back up to full production. Mistik is a 50/50 joint venture between Norsask and Meadow Lake Mechanical Pulp, and uses independent contractors to harvest a portion of the 650,000 cubic metres of softwood Norsask needs to run two full shifts (see our next issue for more on Mistik and its contractors). The remaining volume comes from the Sakaw Askiy Forest Management Area, formerly known as the Prince Albert Forest Management Area.

“There’s a ramp-up in the woods too as they get the contractor workforce up to speed, both in logging and trucking,” Neufeld explains. “If we went right up to two full shifts before that happens there is a concern we could run out of logs later in the summer.”

Neufeld adds that if they have a good summer harvest, they should be able to ramp up and stretch the log supply out until freeze-up.

Log supply aside, it will take time to hire and train enough people to get back to a full two shifts. The real challenge is getting skilled tradespeople, with competition from the resource sector, as pulp, OSB, oil and gas, uranium and potash are all surging. Fort McMurray is just a few hours to the west. Yet even for the jobs where they can supply in-house training, Neufeld says they need time to transition that many people in and get them up to speed.

Still, the mill is already up to 92 hourly employees and 16 salaried staff, not counting woodlands.

Investing in phases
Thanks to a $3.5-million planer mill upgrade, those employees have reason to be optimistic in their long-term prospects. The planer mill investment is what Norsask calls Phase One of a multi-year investment plan, and as Neufeld says, it made sense to start at the end.

“Like most sawmills we have a rolling Top 10 list of investment opportunities, including things that need to get done in the sawmill and in drying. It didn’t make sense to tackle those first though, since the planer was just keeping up with production from the existing sawmill equipment.”

The original planer mill consisted of a main line with a secondary trim line. It was labour intensive, more complicated than need be, and left money on the table in the form of excess trim loss. Neufeld explains that while the planer and bander/wrapper remain vintage, everything in between is essentially state of the art, all part of a Wolftek turnkey project.

The planer mill flow starts with the vintage lumber unstacker and planer, but from the planer outfeed is all-new, including the NMI MCPro 2500T moisture meter. That is followed by a VAB Solutions lineal grade optimizer that includes a UV lumber tracking system and VAB’s downstream transverse warp module. The latter uses a set of cameras and lasers to measure twist, crook and bow in addition to the long list of defects handled by the lineal unit. Combined, these drive the trim and sort decisions.

Lumber is grade marked via a WinJet II inkjet system from BC’s Z-Tec Automation Systems. In addition to simple grade marks, Norsask is looking at the possibility of adding other marketing information, including its FSC certification.

All of the planer mill lumber handing, singulating, positioning, trimming and stacking gear is from Carbotech, with its regular partner DO2 Control handling automation and controls. The high-speed trimmer features two saw banks, with four in the back and 10 up front, with lumber positioned by even-ending chains against an optimized paddle-type fence.

The original mill had 15 sort bins, but Carbotech added 15 more. These are followed by a Carbotech dual-lift stacker line that Neufeld feels will have no problems keeping up. From here on is the mill’s original Samuel Acme strapping and  wrapping line.

As to why they went with Wolftek as turnkey supplier and these three particular technology partners on the project, Neufeld says it all started with the need to add automated grade optimization. The forester-turned-sawmiller had some background with different automated graders from his days working for Tolko, and joined the team at Norsask in choosing technology partners.

“We saw a good payback there from trim loss reduction, grade uplift, productivity increases, and staffing reductions, so that’s where we started. But like when renovations on the basement bathroom lead to redoing the whole basement, we ended up adding to the scope of the project. It didn’t make sense to leave the rest of the mill as is. So we started looking at additional changes to our finishing line to take full advantage of the new grade optimizer, and I had some experience from my days at Tolko, where we ran a wide variety of them, and Norsask had done some research before I arrived. VAB stood out for a number of reasons.”

Neufeld lists simplicity (one calibration per year), a compact design (they had space constraints in the existing mill), and value as the deciding factors. Plus when they contacted other mills using the system, like Sexton in Newfoundland and Eacom in Nairn Centre, Ont., they heard little but positives about the systems and service.

“Once we made that decision, the rest fell into place. VAB had done a lot of work back east with Carbotech, who works a lot with DO2, so our comfort level went up pretty quickly with all the partners.”

The new gear was installed over a three-week period in February, with the plant restarting Feb. 25. When Canadian Forest Industries was on site in May, the crew had just over two months under its belt. At the time Neufeld noted that they were not yet up to pro forma budget numbers, but they were making good progress.

“We’ve worked through the usual start-up and training issues. Though some issues remain, much of what we are dealing with now isn’t related to the new equipment. Many of the delays now are tied to the original equipment where we are seeing some bottlenecks. At the same time, we have a lot of new employees as we add the second shift, so they take a little more time handling jams or downtime until they get more experience. This was not unexpected.”

As for the performance of the new equipment, Neufeld is satisfied. The mill has gone from a dual sort line planer mill flow with dual stackers to staff and maintain and lumber graders to a simple single-line flow. The grade optimizer still needs a little tuning to do a better job on knots, but Neufeld adds that this was not a surprise either.

“We knew going in that it’s not yet really, really good at picking up knots, but VAB is working on an upgrade for late this summer. We’re allowed five per cent in any pack anyway, so it’s not an issue. We also have to have a grader on the line at all times to meet our grade association rules, so we make sure the stacker operator is a licensed grader. He can keep an eye out for any blatant problem pieces and pull them, and it doesn’t cost us any extra staff. We could leave these in and still meet our grade rules, but our reputation for quality is really strong, so we’ll take those pieces out rather than push the five per cent.”

Next steps
As Neufeld says, Norsask’s rolling Top 10 list remains, starting with the sawmill. The current mill is a three-line Optimil showcase, with large- and small-log circular saw canters and a Pee-Wee Chip-n-Saw line. Logs are a mix of pine, fir and white spruce, with the latter currently the dominant species. The log supply when we were on site was outstanding, and Neufeld admits they are blessed with high-quality timber, especially the white spruce.

Logs are brought to the mill in 17- and 18-foot lengths, debarked on Nicholson A5 debarkers and slashed into a mix of eight- and nine-foot logs on a New West Industries transverse slasher line. These are sorted into five bins – two each for the canters and one for the Pee-Wee line. Primary breakdown is followed by Optimil gang edgers and a pair of Optimil board edgers.

Much like the planer mill project, Neufeld says the initial focus of any sawmill upgrade will be in modernizing the optimization hardware and software to improve volume and grade recovery. They are also looking at converting the canter from outdated chipping heads with side saws to new chipping heads for the opening faces.

Neufeld would also like to build in more log surge capacity after the slasher. Currently if the debarkers or slasher go down for more than 20 minutes, the mill may shut down. There are structural impediments to retrofitting a surge and re-entry deck, but the mill continues to look for solutions. MLTC has a massive co-gen project nearing approval, and the residual flow redesigns required for that may afford the opportunity to tackle the surge issue as well (see sidebar on bioenergy).

After the sawmill, Norsask has eyes on lumber drying. The mill currently runs three  kilns – two Wellons and one Salton (newer). Neufeld says that despite air drying its fir, the mill is still pushing capacity for drying, and he imagines they will add a fourth kiln in the near future.

“We’re still ramping up the planer production, but these investments will likely take place in the near future. We’ll likely start with the kiln capacity, perhaps as early as later this summer.”

In the end, Neufeld says a reasonable production target for the mill on two shifts is 160 million board feet. That in itself justifies the planer investment.

“The old finishing line would never have kept that pace. Even the new one would struggle with that flow until we get all the kinks worked out.”

Pushing production limits, investing capital, adding staff, and talking future investments. For the folks in the Meadow Lake region, that beats talking about survival mode any day.

Powering Up
In addition to accelerating its Norsask Forest Products lumber operation in northwestern Saskatchewan, Meadow Lake Tribal Council (MLTC) is also expanding its bioenergy portfolio. MLTC is 100 per cent owned by nine First Nations communities around Meadow Lake, and holds a diverse array of companies, including forestry, aviation and trucking. The bulk of its holdings are somehow tied to the province’s forest sector, with its recent foray into bioenergy serving as another example of that.

“We have a very synergistic approach to our forest business,” explains Trevor Reid, vice-president and COO of MLTC Industrial Investments Limited Partnership. “We like to see all the streams connected, and all with revenue attached to get the most from the resource. Adding the energy component is a logical next step.”

Pellet Projects
The first of these projects has been an R&D scale pellet plant and marketing arm. Located adjacent to the Norsask sawmill and feeding off dry planer shavings, the current plant can make up to one ton/hour. As Reid explains, the objectives are different than Canada’s mainstream export-driven pellet industry.

“The goal was to produce enough pellets to develop and feed five local pilot heating projects, arranged either through our subsidiaries or our communities that are dependent on oil or propane. The pellets we make currently feed the new planer mill building, Westwind Aviation’s hangar in Saskatoon, MLTC Northern Trucking’s shop, a school in Big Island Lake First Nation, and four houses in Canoe Lake Cree Nation.”

With over half of MLTC’s communities dependent on oil or propane, the vision is to take a residual from the forest operations, convert it to a fuel, and act as a utility that can provide turnkey, renewable heat at a savings to the end user.
“We are challenged logistically from a pellet export perspective, but at the same time we see a real need among our communities for an alternative fuel. Rather than treating pellets like a commodity, we’ll offer total heating packages that we’ll supply with our pellets.”

The company has been collecting data for the past 18 months, and feels comfortable now increasing production to consume the full mill shavings output. That will amount to 40 to 50 tons per shift, for about 35 tons of pellets per shift.

Residual Power
Part of the reason for a slight delay in expanding the pellet project has been a welcome distraction in trying to get a massive 40-megawatt power generation project going (36-megawatt net). The $210 million project ($160 million for construction costs) has been in the works for almost three years, and when we spoke with Reid in late June, the final steps were being taken to secure debt financing, and an engineering, procurement and construction (EPC) turnkey contractor had been selected. Reid was anticipating foundation work to start in the fall.

One of the main drivers for the project sits just a few hundred metres from the Norsask sawmill, in the form of one of Canada’s few remaining tee-pee burners.

“It’s an obvious opportunity to turn a liability into revenue, and completes the whole business model. Also Saskatchewan has seen tremendous growth in recent years, and expects more. Sask Power is reaching out via the First Nations Power Authority for some significant extra generating capacity, and we see a role in that.”

With its own integrated forestry operation, MLTC avoids the fuel risk that many other proposed bioenergy projects can get bogged down in.

“The sawmill provides 50 to 60 per cent of the needs of the proposed plant. Our preference is to get the rest in the form of residuals from other plants, but regardless we have the fibre from harvest residuals and other supplies. We’ve had an independent fuel study done, and we have a secure supply.”

All of the power generated would be sold direct to the grid. Stay tuned for updates on both these bioenergy projects in Canadian Biomass magazine or online at www.canadianbiomassmagazine.ca.

September 17, 2013  By Scott Jamieson