Due to the scarcity of quality logs, the hardwood lumber manufacturing industry has been compelled to rely more and more heavily on lower grade or size logs, with a significant impact on the profitability of existing operations.
Tests conducted in a conventional sawmill equipped with a carriage and a resaw show that the conversion of 6 and 7-foot short logs entails losses of $85/Mbf for hard maple and $103/Mbf for white birch. An additional sample of below grade hard maple logs, 8 feet and over in lengths, selected from previous studies, led to even more severe losses of $121/Mbf. Only the better quality below grade logs and those in diameter classes over 30 cm generated profits; unfortunately, such diameters represent only a very small percentage of the available resource.
According to our simulations, a conventional mill cutting about 500 sawlogs per shift could include up to 70% hard maple short logs in its regular production before getting into a loss situation. If the same mill used short or below grade logs exclusively, it would have to process over 900 short logs or 725 below grade logs to reach the breakeven point. To generate a 10% profit, it would have to process some 1100 short logs or 900 below grade logs.
Such productivity levels are only achievable with more linear manufacturing processes. Our simulations showed that the addition of a second production line equipped with an end-dogging carriage system to process 1300 hard maple short logs per shift would barely cover costs, profits being in the order of $9/Mbf, i.e. $181,000/year. The drastic escalation of production costs due to the second line limits the effect of greater productivity on the expected profitability of the mill. The second line would need to process 1800 maple short logs per shift for the mill to achieve 10% profits, i.e. $71/Mbf or $1.8 million/year. This level of productivity can be obtained with twin saws fed with a sharp chain rather then an end-dogging carriage system.
Hardwood lumber producers should consider producing lumber that meets specific client requirements rather than simply meeting NHLA rules. Just by grading our lower grade boards on their better face to recover a certain percentage of clear cuttings instead of applying NHLA rules, we increased the value of our maple and birch products by $26/Mbf and $18/Mbf respectively with negligible impact on volume.
Significantly greater gains are achievable. If the whole production was graded to NHLA rules on its better face, it would be possible to generate 31% more #1 Common & Better maple and 46% more #1 Common & Better birch. In addition, the percentage of sapwood boards would increase by 5% with both species.