Two case studies show how it’s done

Case 2¾Pleasant River Lumber, Dover-Foxcroft, Maine

Pleasant River Lumber is also a family enterprise. Company president Luke Brochu purchased Pleasant River Lumber just last year with his two brothers, Adrian and Guy. Also in the partnership are Adrian’s two sons, Christopher and Jason, and their family friend and certified public accountant Rodney Irish.

Pleasant River sells dimension framing lumber generated from Maine spruce logs for the housing industry. Their market is to wholesale customers nationwide.

Luke and the other principals worked hard to develop a cohesive management and employee team for their new venture. Things have worked out so successfully that Pleasant River was named Saw Mill Manufacturer of the Year by the Maine Forest Products Council.

Luke explains the process

Luke recently took some time out from a very busy day to describe the optimizing process:

“To obtain the most lumber from each log, the optimized log infeed system uses 3-D scanning technology to determine the optimized sawing axis. Scanners inside the system determine each log’s optimal cutting position in relation to the cutting tools. The system corrects the position continuously until it reaches the position calculated by the optimizer. After the log is perfectly situated, the system holds the position and feeds the log to the canter/twin [the sawing system], which executes the decision that the optimizer made.

Basically, as Luke describes it, the optimizer analyzes a log and makes all cutting decisions. He adds, “It then transmits that information to the mechanical aspects of the process. The system also allows us to precisely control gaps between each log, so we can put through more logs per day, and process up to 16 logs per minute.”

But that’s not all …

The second component of the Pleasant River project is an edger optimizer. Similar to the infeed system technology just described, this technology examines and optimizes board edges in increments of one ten-thousandth of an inch!

A $5-million investment¾and a generous payback

“When all is said and done,” said Luke, “we will have invested approximately $5 million in the plant. This will bring us up to date with current technology. As a commodities business, we need to do whatever we can to recover as much lumber as possible from every log. We also need to provide competitive pricing, which we can’t have without optimal lumber recovery.”

He added, “We calculated how much we needed to improve lumber recovery to justify the investment, and found that with a conservative improvement, our payback will be in about three years.”

The system was just installed in July so the numbers aren’t in yet. But Luke estimates that the company can increase production from 1.5 million to 2 million board feet per week, which is a 25 percent increase.

“We may be optimistic about achieving these objectives,” he said, “but based on our equipment and our staff and our collective years of experience in this business, I believe we can do it.”

Looking back, Luke noted, “During six months of intensive research, we turned over every stone. We proceeded cautiously, investigated thoroughly and didn’t lie to ourselves. We involved people from different disciplines, listened to their frank evaluations and saw various systems in action with our own eyes. Then we put it all in a big melting pot, kept stirring and the answer came to the surface.”

Luke concluded, “We chose a system with simple, user-friendly technology that runs at a steady, consistent beat. But you’ve got to remember that the technology doesn’t run itself. It needs an entire team at the mill to make it work, which we have.”

Pleasant River and Farm Credit

Luke is quick to add that Farm Credit was also a trusted partner in the venture. Pleasant River’s Farm Credit of Maine loan officer, Scott Kenney, worked alongside them to pull the venture together in a short period of time. “Scott helped us acquire this facility and add technology. He saw the makings of a good strong team in us and understood our resources as a family allowed us to embark on this new venture. Scott is not just a banker; he’s a partner. He’ll tell us if we’re thinking of doing something that doesn’t make sense, and we appreciate it.”

Case 1 - Steve Riessen, Sun Orchard, Click here

Case 2 - Luke Brochu, Pleasant River Lumber Click here

Is NEW TECHNOLOGY in your future?  Click here

Main article  Click here

This article first appeared in the Summer 2005 issue of Financial Partner magazine. You can receive this FREE publication by clicking here.

Contact us at info@firstpioneer.com for more information.

 

© 1999-2005 First Pioneer Farm Credit, ACA. All rights reserved.