McKenzie Forest Products has taken a creaky and outdated plywood mill in Springfield, Oregon, thoroughly studied its processes and marketing, and embarked on a dynamic modernisation programme which considers the peculiarities of today’s market.
The mill is on the site of the old Booth- Kelly Lumber Co, bought by Georgia-Pacific in the late 1950s.When the present ownership acquired it after bankruptcy it was one of those CDX sheathing mills that popped up in the mid 20th century, fuelled by a  burgeoning housing market and without the competition of the yet-to-be-developed OSB.
The growth of OSB forced some of those sheathing mills out of business. Those remaining started to look at other products that could rest in the safe haven of special niches. Conversely, the very success of OSB, and its eventual premium price, caused  some of the mills to re-think plywood sheathing, which became a profitable product for them.
So it has been with McKenzie. During the glory days of this summer’s market it  occasionally switched at least part of its emphasis back to sheathing.
But generally the company’s emphasis has been on highest-quality panels manufactured  with high-solids exterior PF resins and solid Douglas fir veneers. The AB and AA grades are suitable for both marine and high quality industrial uses. These are manufactured in 3/8in to 1in thicknesses in, so far, 8ft lengths. However, 10ft lengths are planned.
Siding is another speciality, as are sanded panels for furniture, doors and other uses.
McKenzie manufactures Dynea HDO (high density overlay) and MDO (medium density overlay) Plyform for high quality concrete forming. These are 5/8in and 3/4in panels, laid up with a minimum of seven plies, edgesealed and treated with a release agent.
The company’s BB Plyform has a fully-repaired B grade face and back and a minimum of seven plies.
And the old faithful sheathing is designed for light frame wall and roof sheathing in thicknesses from 3/8in to 23/32in, in 8ft, 9ft and 10ft lengths.
McKenzie president and ceo Steven H Killgore traced the history of the operation. “McKenzie started in 1998 after the Springfield Forest Products bankruptcy. It was sort of a ‘buy your way out’ type of thing with the lender and new partners in the mill.”
He explained: “This was a commodity sheathing mill with a green end capability. The strategy was to take it from commodity plywood to speciality panels. The site was in mechanical disarray. And there were environmental issues that are being corrected.”
He recalled: “Except for one year, the other three years were fairly bloody. In April 2002, I was just finishing work with the transition team integrating Weyerhaeuser Company and Willamette Industries.
“While in college in 1976, I worked in a  plywood plant managed by Dennis Spencer. He was one of the principals in McKenzie and asked me to join. It was a point in my life where I thought I had an option to take a risk, to see if we couldn’t get this entity turned around and bring it to profitability by working in concert with the other partners. I Started in June 2002.
“We had a complex situation because we quickly started getting the order file. By then we had an off-line press for HDO, an off-line press for MDO and we installed a  sander.We had grade logs that we could peel and get marine grade. We had a 10ft press  so we could do 9ft and 10ft products.
“The plywood market was still in a fouryear trough of just awful prices. We struggled. We got the order file in place and then came educating customers about our quality products. The bank was very supportive. Our new controller, Jim Meyers, looked into which products were making money and all the complexities. Dennis stepped aside and I picked up the reins as president and ceo.”
Mr Killgore went on to recall: “While we still believed the strategy was correct, that the speciality panels were going to provide the profit opportunity and our long-term position here in the west, we had to find the combination. We had a lay-up line, three spreaders, and four presses – how does all that work together? We did some experimenting in early ’03. The earnings were getting better. We had decreased overtime and the head count; in May ’03 we cut one third of the workforce.We had 300 people and scaled back to about 180, on three shifts, and contracted the product mix to fit.We got the mill to a cash flow break-even by mid-2003.”
In August ’03, the market began improving. The managers knew costs were not in line, but the mill was able to make a profit. Steve Griffith of Optware Solutions, Beaverton, Oregon, suggested a linear programme.
“Once the programme was in place,” Mr Killgore recalled, “it showed that we could have made money with the product mix in prior months. It focused on veneer loss, production flow, flow of veneer and production scheduling.We had some significant changes in the mill’s flow.”
Many of the speciality products weren’t making it. Mr Killgore said commodity  producers who could manufacture any panel other than CDX were doing it. He lamented: “We were not only spinning our wheels, but we had department costs.”
His answer: “Let’s take this as a compass and start gearing our profit mix to the linear programme.We picked up well over 35% savings in our manufacturing costs in that  oneyear period with essentially the same products. We had shut down the lay-up line. The linear programme said you always run the lay-up line, with spreader production the gravy. That was the big change.”
They added Metriguard-graded veneer to the mix and it was available for this year’s favourable LVL market.
McKenzie runs the programme in oneweek windows. It provides the desired volume of each item, by category, thickness and size. It tells what veneer to use and how much profit the mill should be making.
Adalis Corporation, Vancouver, Washington, was another consultant providing an objective opinion on the mill from stem to stern. “We wanted to know what we needed to do for reliability,” said Mr Killgore. “Should something be repaired or should it be replaced to get the plant in reliable operating mode? That was a three-week process with them in the mill, working with our folks and watching machinery. We’ve been working through the recommendations.
“I just wanted another opinion. When you’re so close, it’s sometimes hard to get that objectivity. Adalis is currently engaged in a project to go to a one-step MDO as  efficiently as possible. They also did an efficiency plan for our composer to reduce waste and increase productivity,” he said.
Last year McKenzie added a bonus system based on production, quality and safety. “They’re doing very well,” he said of the employees. “The crew is happier. They’re better informed as we have frequent business update postings, and crew meetings where I talk with them.
“This is an old plant. I don’t think there’s an area we haven’t touched. We still have folks working on the environmental things. We had to rebuild our boiler. We had training. And we had to get the head count right.”
Looking ahead, Mr Killgore said: “We see this all as a potential toehold to possibly get into engineered wood, into something broader. We have the veneer for LVL.We’re opportunists. We’ve moved from survival into performance. We have a very simple  mission: producing quality veneer and plywood with focus and agility. We have to be able to turn on a dime and adjust to the market. If an opportunity comes up down the road, we’ll certainly look at it.”
The mill is now doing 550,000ft2, 3/8in basis, five days a week.
The company also has a green end in nearby Eugene. It provides A and B grades and 9ft and 10ft veneer. The green end in the main mill is a small log installation with an 18in maximum diameter block.
The two green ends provide about 60% of veneer requirements. Mr Killgore said they’re about one third of the way through converting the Springfield lathe to 10ft production. The Eugene green end will eventually close. The final lathe work will be done this winter.
A large share of the mill’s business is on the US West Coast, but it has sales all across the country and into eastern Canada. They’re selling primarily to wholesale distributors. APA is their certifying agency.
Mr Killgore summed it up: “All of us around here are realising these are the good times and we’re enjoying them. We think we’ve positioned ourselves for those times when the markets aren’t so good. We hope we never get tested on that but we’re realistic enough to know that it’s possible. These kinds of prices aren’t going to stay forever.
“There may still be some contraction in the west, probably straight sheathing mills, but I would say those left in our industry are pretty good operators, Their hands are right on the controls and they watch every day. We’re almost a niche in ourselves.”

Potlatch Corporation is a century old western US wood products company with 1.5 million acres of its own timberland, a situation that keeps it in business. Many others, dependent on federal timber, were forced to close after preservationists’ pressures tied up federal forest management.
The company, with 15 mills in the US Pacific Northwest and Midwest, has been in both commodity and speciality wood products production at its St Maries plywood plant for many years. It is located in sparsely populated northern Idaho. During the past year’s booming construction panel market, the company has even produced sheathing when that product’s price was inflated as a result of the rocketing OSB market. But that is an exception.
Annual production is 150 million ft2, 3/8in basis, of plywood and veneer.
Tightly tested, high grade veneer for laminated veneer lumber is an important product sold to other producers. The veneer production is consistent with Potlatch’s trend toward making speciality products and shifting away from conventional construction plywood, which is losing market share to less expensive OSB.
Potlatch means ‘gift’ in the Chinook jargon which native American Indians and fur traders developed to communicate in the early 19th century.
The mill’s scenic setting could be considered a gift. It borders the shadowy St Joe river, a transportation artery in earlier days, and links with an extensive lake system. An adjoining sawmill shares dry land deck and debarking facilities.
Greg Cooperrider, who manages both the plywood mill and sawmill, said: “We’ve focused our operation here on sanded industrial grade. We have a good log supply and a good work force. We’ve been pretty successful at making quality plywood. We’ve taken a little bit of the sheathing business coming along, but we’ve stayed pretty much sanded.”
The situation is fairly well explained by the financial figures. Company communications director Mike Sullivan said: “Potlatch’s net plywood sales fell 14% in 2002 to US$34.9m. Last year the company’s net sales of OSB rose 12% to US$187.3m.” Potlatch manufactures OSB in Midwest mills.
But Potlatch is far from single-minded. It has experimented with many veneer and lumber products and has even given thought to producing an impregnated flooring product from some of the output from its 17,000 acres of poplar plantations.
Another studied speciality is LumaPly, foil faced on one side to minimise heating and cooling.
The mill’s average log diameter has dropped from 13in to 11in in the five years Mr Cooperrider has been in residence. The supply, coming from a 100-mile radius of the mill, is 70% Douglas fir with the balance in larch and white fir. Eighty per cent comes from company-owned lands.
The arriving supply is divided nearly equally between rail and truck transportation. Logs are unloaded by two LeTourneau machines. Caterpillar 980 front end loaders also serve the mill and yard.
The plywood mill will use 42 million board feet of logs in 2005, according to mill superintendent Bill Kopp.
The Cat or LeTourneau machines feed the 35in Nicholson ring barker, followed by a single 6ft circular saw which cuts logs to peeler lengths. The blocks go to the dozen hot water vats for 18 hours. Overhead hoses feed 140°F water. This comes from steam heated heat exchangers. Hog fuel heats the supplying boiler.
Potlatch installed a Metriguard unit two years ago to segregate the high strength material marketed as LVL veneer. Mr Cooperrider said: “Our logs fit the LVL market quite well because of their tight knot structure and the inland species with high MOE [modulus of elasticity].”
A Caterpillar 950 machine transfers the steamed blocks to the log deck feeding the Coe x-y charger which, in turn, serves the Coe lathe with Premier retractable spindles. The large spindle is 61/2in with a 21/2in smaller spindle. Cores kick out at 31/4in. A Coe trash gate diverts unusable roundup destined for hog fuel.
The veneer ribbon flows onto three 110ft trays before transiting the Ventek scanning system and the Durand rotary clipper. A Durand diverter directs 54in pieces to a Durand five-bin stacker. Randoms and fishtails go out to the green chain with three manual sorters.
Four longitudinal Moore steam-heated 22-section dryers dry the output; one sixdeck and three four-deck. These have Durand-Raute feeders and out feed. “We keep our moisture content below 10% because of the industrial panels. We don’t want any warping,” Mr Cooperrider explained.
Two dryers are manually sorted, with two pullers per dryer. The larger dryers, which handle 54s, output to a Ventek scanner segregating the material for a nine-bin Durand stacker. Six Raimann patchers upgrade the veneer.
Three Durand composers fabricate sheets for a Durand Raute automatic five-bin curtain coater lay-up line that can produce three- to nine-ply. The line uses Dynea resins.
Laid-up panels are pressed in a Williams- White 40-opening press and a 30-opening Columbia unit. Both are preceded by Coe pre-presses. Two putty lines follow.
A Globe saw line with standard panel turners trims the panels to standard size. A synthetic patch line, Globe tongue and groove machine, and Smithway six-head sander follow.
After Signode automatic strapping, bundles are loaded on box cars for rail or truck shipment in equal quantities.
The mill produces a good deal of underlayment and solid core A-grade marine ply-wood.  This must be manufactured from all Group 1 wood with solid core lines.
The operation, including office staff, has a total of 195 employees. The green end runs two 10-hour shifts while the dryers run three eight-hour shifts.

The US Pacific Northwest plywood industry once had many worker-owned plants called co-ops (for cooperatives), but only two remain. One of these, Hardel Mutual in Chehalis, Washington is one of the industry’s most successful – and becoming more successful.
Production is being boosted by nearly half, from 13 million ft2,3/8in basis, last year to 35 million ft2 basis when current projects are completed. The workforce will be increased by only 10 to 15%, to about 250.
A new veneer hog was a tiny part of the expansion, but is perhaps a clue of what’s to come.
The general manager minced no words: “I feel very strongly by the time we finish this project we are going to be by far the most productive plywood mill in the world.”
Hardel Mutual buys all its veneer, bypassing the necessity of dealing for timber sales or logs on a market that has been hobbled by environmental road blocks.
What originally set off the upward pace was a disastrous fire that destroyed Hardel’s nearly 50-year-old plant on the Olympia, Washington waterfront. The plant was rebuilt on its present site some 35 miles away.
Kingpin for the past 14 years has been Mr Piliaris who came from his hometown of Athens, Greece, via Australia.
Mr Piliaris is not afraid to spend money if it results in immediate or early returns, as it apparently currently does. All the present US$9m in changes is coming right out of cash. The only debt the mill has is a seven-year purchase contract for the building.
Mr Piliaris is a real ‘hands on’ manager. In his office corner a monitor automatically switches among 20 cameras throughout the mill so he can be immediately aware of any obvious problems in the flow. A big chalkboard is set up on one side with all the major equipment plotted, along with names of the people responsible for each piece.
The current expansion project includes many smaller improvements; at one time Hardel had 22 projects going. The lay-up line wasn’t the only big job. Presses were added and expanded, warehouses built, air quality projects accomplished, and outside storage paved.
Western Pneumatics Inc, Eugene, Oregon, is converting the mill’s RTO (regenerative thermal oxidiser) pollution control on the existing dryers to RCO (regenerative catalytic oxidiser), resulting in fuel savings. Just about to start is a new PPC Industries, Longview, Texas, ESP (electrostatic precipitator) on the Wellons thermal oil heater.
When all the work is completed the mill will have 140 press openings with a 4ft x 8ft, 40-opening; a 4ft x 10ft, 40-opening; a 5ft x 10ft, 30-opening; and a 5ft x 10ft, 30- opening press.
Mr Piliaris is quite philosophical about the high riding plywood market.“Everybody’s making money these days.We’re going to be productive. When the interest rates go up, demand will come down. But that doesn’t worry me as much as the imports.
“The Chinese, the Chileans, the Brazilians, are all building mills. Everybody wants a piece of the pie. Right now there is a shortage of the pie and a huge demand. When things turn around within a year or two, the economy will slow down and the inputs will really increase. That’s what I want to be ready for.”
He laid down the gauntlet: “I want my company ready. When that happens we won’t make millions, but we won’t lose millions. We have always produced and always sold. If  we make US$5 a panel and the profit drops to 50¢, we’re still going to sell it. But not too many people are going to do that. They’re going to be losing money. And they’re the ones who are going to have to cut back. I’m not going to cut back.”
His attitude is based on good management, good production people and very good employees. About half of them are long-time stockholders.
On the company’s policy of staying away from veneer production, he commented, “Wood supply is no problem at all. Veneer prices have not gone up as much as plywood.
Veneer people are doing OK, but plywood people are doing phenomenally well.
“We are a speciality plywood mill. I probably spend 20% or 30% of my time buying veneer. I cherry pick it. A specialised plywood mill has to have good veneer. If you peel it yourself you have to use what you have. I go around to probably 15 veneer plants. I buy 54’s from here, good random from there, good AB from here, 10ft from there. There’s nobody who could do the whole thing [peeling their own] and have that quality of veneer.”
He does his share of importing with Okoume veneer from Brazil to be made into siding. Its qualities are similar to Douglas fir.
The new WSM hog handles the larger residue volume generated by the increased production. The residues go to a Wellons fuel cell, generating hot oil for the mill.
Coe 16-section, 4-deck, and 20-section, three-zone, 4-deck stainless steel dryers have Sweed automatic feeders. Delta T controls continuously control dryer temperature and speeds to conserve energy. Hot oil inlet temperature can run as high as 500°F, to produce drying temperatures as high as 400°F. Viking fire deluge systems are installed.
A third dryer, a Coe 16-section, four-deck jet unit, will be added later this year, with Western Pneumatics RCO pollution control.
Seventeen Skoog patchers offbear to a  circular sorting table. A 10ft Hashimoto composer processes randoms into full widths.
Two Globe 66in 20E manual spreaders will serve mainly speciality products while the lay-up line will handle volumes.
The old press line was made up of a 4ft x 8ft, 40-opening Spar-Tek with pre-press and charger and receiver and a Williams- White 30-opening installation with Globe pre-press and charger and receiver. A 20- opening, 4ft x 8ft Williams-White press was converted from MDO and other specialities to a straight plywood unit.
A Globe saw line accommodates both 8ft and 10ft panels. It offbears to a Burrelbach grade line and stackers. A Globe speciality saw is also installed. Sanding is accomplished on a Kimwood 5ft machine, along with a Timesavers sander.
Hardel has a short railroad spur connecting with the mainline, but most product is trucked, mainly to the US West Coast.
Siding is an important part of the production. Thicknesses range from 1/4in to 1in. Hardel produces a full line of sanded panels and marine grade panels as well as 303 siding and structural 9ft and 10ft sheathing panels. APA is the inspection agency.

Spraying, stencilling and striping packs of panels is a messy necessity for wood based panel manufacturers. An Oregon firm is doing something about that with robotic methods it developed for other industries.
It all results in a painless automatic procedure that the company says does the job, conserves paint, limits messy spray booth clean-up, saves money and is safer.
Precision Technologies, a division of Eugene, Oregon’s Willamette Valley company, already has five of its automated spray booths, and several other lines, in operation in North American panel plants.
This represents the newest arrow in the company’s quiver, which includes such  specialities as resin and catalyst mixing and metering, extrusion heads and systems, finger- joint application systems, polyurethane mixing and a host of other robotic solutions. In the wood panel business, they serve plywood, OSB, and siding manufacturers.
As an example, they have two installations in the US’ newest OSB mill, J M Huber in Broken Bow, Oklahoma.
That 20ft x 20ft x 14ft robotic spray booth uses six-axis industrial application robotic arms by Motoman,West Carrollton, Ohio.
A four-stage down-draft air filtration system has accessible ‘tunnels’ in the bottom of the booth to easily access the filter media and the air can be safely released back into the plant with no outside venting required. This also has the advantage of saving heat energy in cold winter climates.
The system sends a signal to the operator when filter changes are required. The two-stage floor filtration rolls are changed weekly, or as needed. The third stage cartridge is changed monthly and the final stage fibre filter is changed quarterly.
Infeed and outfeed vestibules allow additional airflow to maintain a slight negative pressure within the booth to contain the material.
Of course the fact that these are water-based paints simplifies the air handling problems; there are no toxic fumes. Variable frequency drives on the fan motors automat- ically increase fan speed to maintain constant airflow as filters begin to load. Air flow is adjustable up to about 18,000ft3/minute.
Stencilling the loads to apply logos or grademarks is another part of the development. Stencils are automatically cleaned between loads. This allows the stencil face to come in direct contact with bundles.
The company designs stencils and has them cut from 1/4in aluminium by a local water-jet cutter which operates at 60,000psi. They are anodised to close the pores and thus prevent paint sticking to them.
The end stripe operates separately from the stencil system, but shares some of the controls. It can be placed in line either before or after the stencilling and will apply up to six stripes about 1in wide, with 2in between.
In operation, the load moves to the spraying position and stops. Stripe guns spray the leading end as programmed, the load moves forward, stops, and the trailing end is sprayed. Nailing lines can be applied in the same manner.
Using the same robotic principles, cardboard side protectors can be applied to the sides of 4ft x 8ft tongue and grooved units. In this case, vacuum heads pick up the material and place it against the load, hold it in place and staple it.
The company has developed a system for spraying T&G too, to be sure the grooves are sprayed. There is articulation so it will spray downward in one pass and upward in another.
Precision Technologies’ general manager, Eldon L Owen, enthusiastically describes the company’s system. “We thought the timing was good due to rising costs. We needed to get our spray booths more efficient, with increasing volumes. Our painters were 65 to 70% efficient. Paint that you can’t use, you still have to clean up.”
Mr Owen estimates that the average mill, using 100,000 gallons of paint annually, would save US$60,000 to US$80,000 a year, not including clean-up. Individual costs are about US$225,000 for a spray booth, US$65,000 for a stencil system, and US$45,000 for a striping system.
The system uses only four guns so there is less maintenance. Former spray booths had 10 to 12 guns. Mr Owen recommends weekly head changes because of the high volume. The robot simply brings the heads down to a trap door where they are removed and replaced in seconds.
The spray heads work 10in to 12in from the material and run at 800psi to 1,300psi. There is very little over-spray. Paint is filtered in a high pressure filter.
Mr Owen said that if a 0.019in tip wears to 0.002in, it will increase paint flow by 20%.
In operation, a forklift operator places bundles onto the spray booth rollcase and picks up the bundles on the offbear rollcase. Everything else is automatic.
As the bundles move toward the booth they are automatically scanned for location, height, width and possible skewing. As they move in, the robot verifies these  measurements and the stopping position. The computer makes the proper corrections for the load and directs the robot to begin. After painting, the bundle moves out.
The computer system is stand alone, but it can be tied into a plant computer. Allen- Bradley controls are used.
“You do not have wet waste to clean up,” added Mark Matteson, sales administrator. “Just pull the filters out and change them. Another nice thing about the efficiency of this booth and the way that it’s filtered is that you don’t have to vent through the roof. You can have the air coming from the mill and being exhausted back into the mill. This is a real advantage in a cold country – you don’t have to pull the air in from the outside, heat it up, and send it out the back,” said Mr Matteson.
Mr Owen declared: “Our whole goal was to increase the efficiency of the mills, reduce their clean-up and increase speed. Speed has gotten to be a factor with these larger mills. I think we paint a 4ft x 8ft, 38in high stack in 70 seconds.”
Mr Matteson continued: “When you have a degree of accuracy on a robotic arm of 5/1000, you can use fewer spray guns and you’re closer to the load. You can reduce the pressure, you don’t have as much bounceback or splatter. All those things add up.”
The system employs electric guns, so on  and off timing can be highly accurate, based on  robot speed.
Precision Technologies completely assembles and operates each unit on their shop floor, along with necessary programming. After final inspection it is disassembled to the least degree possible to ease re-erection at the mill. Loads are generally 40ft long.
Mr Owen said: “We developed an automated stencil system that pushes the stencil against the load and it cleans itself every time it paints. It comes back into a wash mechanism in between loads. It gets washed and squeegeed and the water for that is  recycled until it reaches a set tolerance content when it needs to be changed.”
This is water-based paint with wax and resins.
The division employs about 35 people, including five engineers. The forest industry makes up 40% of its work.