Not so long ago, there were hundreds of small, independent sawmills in British Columbia’s Central Interior. For decades, these mills — some of them little more than ‘mom-and-pop’ operations — were the economic backbone of rural BC, providing much-needed jobs and a host of other benefits to remote communities.
In the past two decades, however, B.C.’s forest industry has become increasingly dominated by large, multinational players with the financial resources and expertise to compete in what has become a global marketplace. Today, five major companies control most long-term forest tenures in the province, and independent sawmills are all but a thing of the past.
But in Burns Lake, one company is bucking the trend — and proving that it’s possible to survive in the shadow of big industry. Pacific Timber, a wholly-owned subsidiary of Tahtsa Timber, opened for business in 2011 with one mill and five employees. A scant four years later, the Burns Lake company has expanded its operations to include two mills and 31 employees. In 2014, it spent $1.9 million in direct wages and another $1.3 million in goods and services.
“In the community last year, just between Burns Lake Auto, LD Printing, all the small stuff — no power, no fuel, nothing — the two mills spent $351,000 in town,” Karl Garrett, Pacific Timber’s mill manager, said recently. “That is just the two mills, none of the bush crew or Tahtsa. And in the region that’s between Houston and Prince George… we spent $971,000.”
Garrett and Stephen Burkholder, general manager of Tahtsa Timber, have been telling the Pacific Timber story to almost anyone who will listen lately and they appeared before Burns Lake council.
Garrett told council members May 12 that the company’s two mills — one in the Burns Lake industrial park, the other east of town adjacent Babine Forest Products — specialize in producing cants. Ten per cent of the company’s production is sold to B.C. customers, while 15 per cent is shipped to buyers in Alberta. Fully three-quarters of all finished products are transported by truck to Prince Rupert, where they’re loaded into containers for export to Asia.
“We produce nothing that the majors produce,” Garrett stressed. “Primarily, all our stuff goes to Asia (and the) oil and gas industry — tenon blocks for rig mats, pipe skids. And the treating market. The really low grade stuff that we have goes to pallet manufacturers.”
In 2014, Pacific Timber shipped 14.6 million board feet, the equivalent of 456 super ‘B’ truck loads. This year, production is projected to be 24 million board feet.
Because it strives for maximum log utilization, Pacific Timber also supplies the Pinnacle Renewable Energy Group’s Burns Lake plant with fibre. In 2014, the company supplied the wood pellet producer with 1,450 truck loads of chips, and even sold some of the material to farmers for cattle bedding.
Garrett and Burkholder stressed to council the important role Pacific Timber plays in the community. In addition to the economic benefits already mentioned, the company’s two mills provide much-needed entry level jobs here, often employing people that other firms might be hesitant to hire. It even offers apprenticeships to candidates who express an interest in millwrighting, mechanics, welding, and other trades.
“We’re willing to try anybody, where before, we would try to find the right person,” Garrett said. “If you can get here at 7 (a.m.), and you can make it to 5:30 and give it your all, we’ll train you to do the rest.”
To date, this liberal hiring policy has paid dividends, both for Pacific Timber and the community. Approximately 45 per cent of the company’s employees are First Nations people who come from as far away as Fort St. James, and many of them had little or no experience prior to joining Pacific Timber.
Garrett acknowledges that employee turnover is high. Fully 30 per cent of Pacific Timber’s new hires leave after getting valuable experience in the workforce.
Being a training ground for other companies was something Pacific Timber struggled with initially, says Burkholder, but has since come to accept.
“First we battled that,” he noted. “There was a certain amount of frustration, because you’d get a good guy, and then he’d be gone. But actually, we’ve come to more see ourselves as that stepping stone for people. They come, they work, and some move on. Thankfully, we have a really solid, core group that has displayed a lot of loyalty, but at the same time, for those that want to move on, well, we feel we’re part of that. I think it’s certainly a value in our company, and a value for the area.”
While Pacific Timber is currently enjoying a ‘moment in the sun’, there may be storm clouds on its horizon.
Last year, Pacific Timber’s two mills consumed 76,429 cubic metres (m3) of timber, and this year’s fibre requirements are expected to be 126,000 m3 — the equivalent of 2,290 logging truck loads. While the company has proved it can create value from low-grade logs, it can’t survive solely on timber rejected by others.
“A lot of the wood we’re using falls off the bottom of the scale,” Burkholder pointed out. “It’s wood that didn’t count. Of course, we can’t have all just bad… (In our logging blocks) we’re finding there’s at least 30 to 40 per cent that’s too high a grade for us, and we need to market that to offset our lower cost wood. So to produce our 125,000 meters, we need to log pushing 200,000 m3.”
Finding that much volume isn’t easy for a small, independent sawmill. Burkholder was quick to point out that unlike BC’s larger forest companies, Pacific Timber does not have a Tree Farm License or any other forest tenure that it can count on for feedstock.
This lack of a guaranteed timber supply — historically the bane of BC’s small, independent mills — represents a significant long-term threat to Pacific Timber. It’s an issue that Burkholder and Garrett feel should be of concern to the community as well as the company’s owners.
“This is really the life and death question,” Burkholder said in a subsequent interview. “Without tenure, Pacific Timber does not have the longer term security of a certain amount of volume to either utilize and/or trade with other tenure holders. So in a way, we are at the mercy of the tenure holders.”
And as Burkholder has learned first-hand, not all those tenure holders are sympathetic. With the much of the region’s merchantable timber damaged or destroyed by the mountain pine beetle, competition for fibre can be vicious.
“A higher level manager (at a major forest company) told me it’s his job to eliminate competition, not support it, when I was trying to buy wood that they were going to burn,” Burkholder added. “This, when they are to be stewards of this wood for the best of the society. As the volume decreases, all the milling facilities continue to look at utilization of any fibre, which drives the log value up (and) will impact our ability to be competitive in the marketplace.”
Burkholder says the company will continue to actively seek timber on the open market, and “attempt to continue to salvage wood that is deemed unutilizable (by other producers).” In the meantime, he and Garrett want local residents to know the contribution Pacific Timber is making here. They’re also hoping their recent presentations will help drum up political support for the company. Yet can elected officials help this firm survive in a free market economy?
Burkholder admits it’s “another big question.” He’s convinced, though, that community leaders can help “open doors” that might otherwise remain closed to Pacific Timber.
“We are not used to begging, but one way (elected officials can help) is to understand and appreciate the value that we are bringing to the community by the way of our hiring practices (and) the amount of dollars we bring into the community by being creative and innovative with logs that would have been burned or under-utilized,” he explained. “(They can help) by opening up doors for a more secure log supply through community forests, by encouraging the ministry of forests to look at options like Category 2 timber sales, licenses to cut, or something like a license that targets low-grade logs, i.e., blowdown, low-volume stands, etc…. (and) by putting pressure on the major sawmills to work with us in the low-grade log that they cannot use.”
It’s a gamble, but one the company appears willing to take. “We feel for survival, we need the support of the communities, First Nations, etc.,” Burkholder said. “Also, (it will) open ourselves up to input that others may have, and opportunities that we have not seen.”