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Vaagen: Out of wood, not out of the woods

Can the local community help Vaagen Fibre Canada get out of the woods?

At the start of the new year, Vaagen Fibre Canada announced it is indefinitely shutting down its mill operations in Midway, B.C., citing challenges with accessing wood fibre at market prices. 

The mill will run out its log inventory until mid-February and then begin a shutdown process.

In a village of only 650 people, the closure of its biggest employer will have a huge impact not only in Midway, but also in the surrounding communities.

Its owners, the Vaagen family, who also owns Vaagen Brothers Lumber south of the border, said it is looking for solutions to keep the operation going.

One possible solution is by encouraging those impacted throughout the Boundary, West Kootenay and Okanagan regions of B.C. to appeal to their local members of parliament and to the Ministry of Forests to help keep the mill viable for years to come.

Never say die
The local community has done this in the past. Back then, the people of the area rallied to save the mill and help re-open the shuttered facility.

Indeed, Vaagen Fibre is hoping that the community will rally yet again to save the plant, similar to what happened after the mill’s former owner closed shop and left the community.

Fibre manager Dan MacMaster says the mill operated in Midway without forest tenure for 10 years. Photos: Annex Business Media.

Oregon-based Pope & Talbot owned the Midway sawmill from 1969 and operated it for close to 40 years until it went under and filed for bankruptcy in 2007, leaving some 200 locals out of work.

Fox Forest Products of Montana took over and bought the Midway property in 2008. It briefly operated a pallet manufacturing operation on site, before shutting it down due to the collapse of the U.S. housing market. 

The plant sat idle for three years.

Then in 2011, to save the mill from foreclosure and demolition, local business owners and community members formed a new company, Boundary Sawmills, Inc., to buy the facility from Fox Forest Products and pay off its debts. 

The townsfolk then partnered with the Vaagen family to restart the facility.

Now the Vaagen family said efforts are underway to meet with provincial officials, including former forests minister and now finance minister Katrine Conroy, the new Minister of Forests Bruce Ralston and Boundary-Similkameen member of the legislative assembly Roly Russell.

Out of wood, and not out of the woods
Vaagen Fibre did not have any tenure. Canadian Forest Industries visited the Midway facility in August 2022 and Vaagen’s fibre manager Dan MacMaster explained that “to keep the mill running, we have to be creative and collaborative in our approach to securing fibre.”

The closure affects 85 employees, as well as nearly 100 contractors, vendors, and suppliers.

He added that wood was sourced through private timber sales and woodlot owners, and through working with community forests and the First Nations. Log trading also kept the mill afloat, where they trade large logs for smaller logs with neighbouring sawmills. The Midway sawmill specialized in small diameter logs.

“It’s about bringing the right log to the right mill,” MacMaster told CFI. Vaagen traded logs with fellow members of the Interior Lumber Manufacturers Association comprising family-owned mills in the southern interior of B.C.

“We mill small diameter logs which accounts for around 65 per cent of the volume we manage. The other 35 per cent are hauled to other mills that can get the most value from the logs,” he added.

“To us, it’s not about more wood – it’s about secure and reliable access to fibre to ensure our mill is viable and can operate at maximum efficiency to benefit our workers, First Nations, and the communities.”

Now that economically available wood has dried up in B.C., the sawmill’s HewSaw equipment – a modified RS200, its three debarkers: two Nicholson A5 and an 18” cambio, as well as five sort log bins, a Newnes 24’ trimmer with a D-Tec scanner, a Newnes 65 bin J hook sorter, a USNR stacker, a Wellons controlled thermal oil boiler and two dry kilns will all sit quietly in Midway come end of February.

At the time of CFI’s visit, Vaagen Fibre Canada had a total of 85 employees comprising production, clean-up, maintenance, forestry and management staff. It indirectly employed 100 contractors, vendors and suppliers.

MacMaster said about half of the workers had been laid off immediately after the closure announcement.

“The impact will be felt by our employees and their families, our suppliers, contractors, and businesses in the local area, like restaurants, stores, and other general services in the rural communities,” MacMaster sighed.

The Midway facility makes between 60-70 Mbf per year of 2×4, 2×6, 2×8, with lengths from 8’ to 20’ on one production shift, with an afternoon and weekend maintenance shifts.

The Midway plant cut larch, Douglas fir, pine, spruce, balsam, hemlock, with log sizes from 4.5” to 14” diameter.

Residual hog is sold to Avista Utilities, an electric and natural gas company in Kettle Falls, Wash., for production of green energy. Residual chips goes to Mercer’s Celgar mill in neighboring Castlegar, B.C.  Residual sawdust is sold to Drax, and beauty bark is sold for landscaping material.

The ripple effect of Vaagen Fibre’s closure is imminent: shortly after Vaagen’s closure announcement, the Celgar mill followed and announced a three-week curtailment commencing in March due to lack of proper fibre supply.

Partnerships fundamental
Vaagen Fibre has been integral to the formation and sustainable management of the West Boundary Community Forest. Similarly, Vaagen Fibre worked closely with the Osoyoos Indian Band to develop a forestry program. The venture brought employment, educational opportunities and other benefits to the communities of Midway and neighbouring Greenwood. At the same time, the longstanding relationship has been crucial to Vaagen.

McMaster said although securing tenure could help in the long-term, their goal is to strengthen partnerships to find wood.

In addition, the owners are hoping that the provincial government will find solutions to the problem.

“This is an access to wood fibre at market price issue,” said a statement signed by Duane Vaagen, Kurtis Vaagen and Emily Vaagen Baker.

“As a non-tenured mill, we do not have forest licences to manage Crown forests, which means we must purchase all our logs on the open market including the procurement of logs from local private landowners and woodlot owners. Although our team has been creative for years in finding logs to run our mill, there are a few challenges that have compounded for us, and without resolution, the future of our operation is uncertain,” the family added.