PAGE 8 OCTOBER 20, 1978
Mill Improvements Recommended for Maximum Returns
by Cynthia Stowell
The Tribes can realize the
optimum value of its timber over
the next ten years by investing $6
million into improving Warm
Springs Forest Products Indus
tries facilities, wood products
consultant Ed Williston told the
Tribal Council Monday.
Williston was
presenting
Council with the findings of his
nine-month study, requested by
the Tribes and financed by the
Economic Development Admin
istration. The purpose of the
$55,000 study was to determine,
the optimum products that W.S.,
F.P.I. should manufacture and
the optimum conversion facili
ties (processing plant) needed to
maximize returns on the avail
able raw materials.
The study found no justifica
tion for the building of a new
sawmill and recommended no
major shift in product line.
Instead, modernization will
be the key to maximizing profit,
Williston said, noting that the
W.S.F.P.I. mills need to be
brought up to “state of the art”
industry standards. Improvem
ents would result in immediate
annual savings, paying for them
selves within three or four years,
he said.
Williston stressed that in
making necessary improve
ments it must be remembered
that lumber has five times the
market value of chips and ten
times the value of sawdust.
Whenever a log can convert to
lumber, it should, he said.
While the bulk of Williston’s
recommendations were specific
to improvements in the sawmill,
studmill, veneer plant and ply
wood lay-up plant, he also of-
ferd observations on the prepa
ration and transfer of the raw
material.
He was “disappointed” to
find that the B.I.A. does not have
a. “complete forest inventory,”
making long range management
and planning difficult if not
impossible. However, he noted
that the inventory statistics and.
projection supplied to him were
adequate for his study.
The consultant also noted
that logs are being transferred
from the woods to manufactur
ing operations at a price far
below true market value. This
makes it appear that the mill’s
profit picture is rosier than it is,
when in reality manufacturing
inefficiencies are being masked
by the exceptional savings in raw
material purchase.
Logging practices also need
to be sharpened, Williston sug
gested, thereby
eliminating
waste at the earliest point.
Why a study?
The need for a study such as
Williston’s became apparent to
the Council when discussion
about the future of the W.S.F.P.I.
facility reached an impasse.
There were many unknown fac
tors, among them market out
looks, the condition and potential
of existing conversion facilities,
and the availability of the re
source.
There has also been concern
about the unprofitability of the
plywood lay-up plant in Madras.
In order to address these
concerns, Williston identified
and carried out five tasks which
were:
1. Examination of timber
resource data.
2. Evaluation of the mills.
3. Identification of optimum
product lines.
4. Development plan for
optimum conversion facilities.
5. Evaluation of expected
return on investments.
Williston used a number of
methods in his study, including
on-site observation«
running
tests on processing efficiency,
and simulating mill operations
by computer.
In addition to his own years
of experience in wood products
manufacture, Williston utilized
the talents of subcontractors, the
Bureau of Indian Affairs, U.S.
Forest Service, and W.S.F.P.I.
management.
Williston’s findings appear
to contradict former W.S.F.P.I.
manager
Persh
Andrews’
thoughts about converting the
mill for small log handling and
whole log chipping. The raw
material picture for the next ten
years does not justify such
modifications at this point, said
Williston, although he noted that
at the rate forestry practices and
conversion techniques
are
changing, further facility chan
ges will undoubtedly be required
after that ten year period.
It makes more sense dol
lar-wise to seek
short-term
pay-offs on investments rather
than to convert the operations
based on a change in the avail
able resource that may be dec
ades away, he said.
A total capital
cost of
$6,008,646 should result in annual
savings of $3,804,573 after a
pay-out time of 3-4 years. The
return on investment should be
slightly better than 80 percent.
What next?
HARD HEADS - Members of the Tribal Council were taken through the WSFPI mills by Manager Ralph
DeMoisy Tuesday before hearing the final report on the mill study they requested last year. Rita
Squiemphen, Larry Calica, Karen Wallulatum, Elmer Quinn, and Delbert Frank were among those
council members concerned enough about the future of the mill to hire consultant Ed Williston to take a
good hard look at the operation.
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With the study results di
gested, W.S.F.P.I. management
is preparing recommendations
to the Board for capital invest
ments to be made in the coming
year, said manager
Ralph
DeMoisy.
These
recommendations,
which will be presented to the
Board on Monday, are accomp
anied by a sense of urgency, he
noted. Since it takes six to eight
months to acquire some of the
needed equipment, a decision
must be made very soon, said
DeMoisy.
The manager went on to say,
“1979 is the big construction
year, with refinements and shak
ing down in the year 1980.”
Improvements will be made with
the least interruption in produc
tion possible, he said. After such
major changes it takes a facility
a year or so to “smooth out” the!
rough spots.
A Closer Look At The Mill Study
In his evaluation of the
Warm Springs Forest Products
mills and their potential in the
manufacture of marketable pro
ducts, Ed Williston covered a
wide spectrum of concerns, from
management of the resource to
market outlooks. His observa
tions and
recommendations,
which were often quite specific,
are summarized here by area of
inquiry.
Raw Materials
-The B.I.A.’s forestry inventory
is inadequate, as it does not;
include grade along with size and
species. The current inventory
design being created by Paul
Sanders and Wes Rickard should
prove to be valuable.
-Logs should be sold to the mill
at true market value, not the
B.I.A.’s appraised value which is
much lower. No. 3 fir sawlogs
selling for $250 per thousand
board feet in the outside market
are being transferred to the
veneer plant at $150.
This
savings in raw materials acts as
a smoke screen for manufactur
ing inefficiencies.
-Felling and bucking practices
could be improved to lessen
waste and increase earnings.
For instance, notches should be
in the stump, not the log butt, and
logs should be bucked more
accurately to avoid short and
long logs.
-Culls, or old trees with weak
cores, often have marketable
outer layers and should be
utilized more frequently in the
sawmill.
-Safer access to the mill from
the highway for log delivery
would lessen the likelihood of
injury, death and-or costly law
suit.
Sawmill
-Only larger logs (11 inches and
up) should go tô thé sawmill to
best fit the equipment. Small
logs should go to the studmill.
-Continue the current pine prod
uct line (shop lumber
and
finished boards).
-Replace, repair or otherwise
update equipment to maximize
efficiency, increasing lumber re
covery by 7-9 percent or 880,000 a
year.
Plywood Plant
lay-up might be automated to
The plywood lay-up plant in increase efficiency.
Madras lost money in 1977 and -The plywood market looks fav
faced either a shutdown or orable for the short and midterm
drastic changes. These improve and even though the longterm
ments were suggested:
may favor such competitive
—Veneer should be transferred at products as wafer board, invest
market price and the plywood ment into the plywood plant
plant should have first refusal would mean quick pay-out and
with the option of later selling, high profit.
swapping or buying materials.
Right now 30 percent of the Residuals
Studmill
-More logs (11“ maximum dia veneer is being sold green to -Never make chips instead of
meter) are needed to supply the outside markets.
lumber or plywood. They are far
studmill. Possible sources are -Move the plywood plant down to less profitable.
thinned trees, diversion of more the Warm Springs site. This -Make as little hog fuel as
small logs from the sawmill and would eliminate much of the possible. (Hog fuel is sawdust,
veneer plant, or retaining veneer breakage that is occuring in the bark, and non-chippable scraps).
transporting of dried veneer to This will mean less fuel for the
cores now being sold.
-Replace, repair or otherwise Madras. It would also eliminate powerhouse but Williston’s ad
update equipment including the hauling costs, make mainten vice was “Don’t feed
the
addition of two saws to better ance more convenient, expedite monster.” Williston feels the
control and supervision, and cut three generators were a good
utilize each log.
-Studs (2”x4”x8’ lumber for down on handling.
investment despite the shortage'
house framing) will continue to -Driers should be repaired to of fuel and says they will pay for
be a “bread and butter” product ensure better quality veneer and themselves.
for W.S.F.P.I.
Veneer Plant
-Because of the reduced volume
of logs available (down 28 per
cent from 1977) arid the ineffic
iency of the conversion opera
tion, a hard look was taken at
whether the fir logs would be
better used for lumber or veneer.
It was concluded that veneer
would be more profitable.
-The green veneer market looks
very favorable but the direct sale
of veneer must be weighed
against the potential profitability
of maintaining the plywood op
eration (by which dried veneer is
glued together to make ply
wood).
-The veneer plant needs to be
improved. Some deficiencies
have been corrected already,
such as leaking steam vat doors
and the need for moisture control
devices, but new peeling equip
ment is still needed.
AGING HEADRIG - Built in 1901, the headrig in the sawmill is
obsolete, said Williston who conducted the mill study. The carriage
needs to be rebuilt, a thinner saw would reduce sawdust and the
sawyer could use digital setworks to saw more precisely. Many such
improvements were recommended by Williston.
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