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Michigan Log Home Company Expands White Cedar Business
$2.5 Million Investment Doubles Mill Production of Specialty Cedar
By Tim Cox
Date Posted: 6/1/2004
Town & Country, with roots more than 50 years in the business of making log homes from Northern white cedar, is the world’s largest custom builder of white cedar log and timber crafted homes, according to the company. In recent years it created its Heartwood Cedar & Pine Products division in order to expand, adding manufacturing capacity in order to sell log home lumber products directly to building contractors and other customers.
The original business was started in 1947 by Bernie Konrad and Ben Organek in Boyne Falls, Mich. Bernie was a logger and Ben operated a sawmill in the community in the northern region of lower Michigan.
Bernie was attracted to Northern white cedar stemming from experiences that went back to his boyhood, as retold by Eric Hausler, Heartwood’s managing director. When he was about eight or nine, Bernie’s father asked him to build a fence, which he constructed of Northern white cedar. When he was in his 20s, his father asked him to repair the fence. Bernie extended the life of the fence by removing the posts and turning them upside down; the portion of the posts that had been underground was still in good condition.
Later, when he was about to marry, he was considering building a house. “He thought, ‘If this stuff can sit in the ground like that and be okay, I want to build a house out of it,’ ” said Eric.
The log cabins were about 1,800 square feet. Homeowners purchased them as second homes. “The payments on them were less than what I pay for cable,” remarked Eric. They began doing as few as one per month.
Bernie and Ben marketed and sold the kits through independent dealers who re-sold them to consumers. Their market was predominantly local in nature although they sold some kits to dealers on the East Coast.
The men worked strictly with Northern white cedar. In addition to
Northern white cedar has a unique cell structure that makes it very resistant to insects, rot and decay; like cork, it does not absorb moisture. It is light-weight, easy to work with, features consistent coloring and holds finishes well. It weathers evenly and attractively. These factors, combined with its superior dimensional stability and insulative value, make it an excellent building material.
It is not a high-yield tree, however. It grows relatively small, and stems have sweep and taper. For that reason it is not attractive to large, industrial forest products companies, whose strength is high-volume manufacturing.
The business prospered and grew over the years as log homes gained in popularity. At the height of their success, Bernie and Ben were producing about 300 kits annually.
In 1976, Bernie and Ben sold the company to Robert Mock, a retired financial officer for Poulte Homes, a large developer of single family homes. He quickly added marketing efforts that took the business in two important new directions. Under his guidance, the company went from a supplier of log home kits sold primarily for cabins or second residences to larger, more sophisticated packages for primary residences. The homes, including standard models and custom units, became larger and more complex and involved increased engineering. At the same time, the company began marketing its kits with a more national emphasis. Robert filled a niche where there were no other companies, and the business flourished further.
Steve Biggs was vice president of sales and
They continued to expand the company’s market throughout the
Ironically, Steve and
They created the new Heartwood division and hired Eric to manage it. The company invested $2.5 million to double mill capacity. The company also reached agreements with some of the largest producers of Northern white cedar, giving it access to up to 15-20,000 cords annually.
The new Heartwood division sells specialty cedar and pine lumber products – the company’s focus still is primarily Northern white cedar, which comprises about 99% of its inventory -- by the linear foot to building contractors, log home businesses, and modular home companies.
The Heartwood division also has an agreement as an exclusive supplier of log home packages to Ameri-Log, the log home division of All American Homes, a leading modular home manufacturer with seven plants throughout the U.S. Model homes constructed of packages supplied by Heartwood are in the process of being constructed at the All American Homes plants as well as its dealer locations.
Town & Country continues to design, engineer, supply materials and build log and timber frame homes that are marketed by a worldwide network of sales directors. The company has migrated into the luxury home market. The average price tag is about $1 million with the low end of its market range about $500,000. Prices for kits supplied to Ameri-Log are significantly lower; they range from about $250,000 to $600,000. The company’s highest priced project was a $10 million turn-key home it sold about two years ago. It built a boat house for Microsoft entrepreneur Bill Gates at his
Town & Country no longer makes log home packages featuring solid log wall construction. However, its products may be combined to provide the look of solid log walls. For example, it manufactures log siding for interior and exterior applications as well as corner components that resemble solid log construction.
Town & Country’s combined operations employ about 85 people and close to 100 in the summer. In addition to its mill operations in
Town & Country, including its Heartwood division, produces 5 million board feet of cedar products annually. Prior to the expansion, production was about 1 million board feet.
The company projects 2004 sales at about $33 million -- $14 million for Town & Country’s packages, $6 million for Heartwood’s materials, $3 million for its modular log home dealership, and the remainder – about $10 million – for its construction division.
The Town & Country construction division works through independent building contractors the company has been dealing with for 30 years. Its contract construction crews travel throughout the
Heartwood’s catalog of products includes corners, decking, paneling, posts, rafters, log siding, log component trim, and fencing. Other products include structural and nonstructural timbers, interior rails and pickets and even furniture.
The mills use an inventory management control system that is similar to what is used in a grocery store. Lumber products are tagged with bar code labels, and the labels are ‘read’ by a portable wand to capture the data. The system is used to track production and inventory levels.
The $2.5 million investment included a new 12,500-square-foot plant building and a custom-developed production system to produce building products. All drawings were put on a computerized drafting system in a computer program that also generates material lists. Other improvements included two Nyle dry kilns, each with a capacity of about 60,000 board feet, which increased kiln capacity to 140,000 board feet; Town & Country consulted with an engineering firm for technical assistance, and the kilns were modified accordingly by Nyle in order to dry Northern white cedar.
The heart of the new plant is an automated production line with sophisticated computer controls that were custom designed, engineered and built by Barnette Design Works in
The new production line is a three-step process that takes kiln dried material and runs it through moulders to be shaped. Workers put a chalk mark to indicate defects, which are ‘read’ automatically and cut out. The defects are conveyed off the line and collected while the good material continues down the line to be end matched.
Log components are similarly end matched, with a tongue and groove on adjoining ends to ensure they fit and lock together. The feature has enabled contractors to reduce labor costs by 20% and provides them with 100% usable components – no waste.
The company’s Northern white cedar raw material typically consists of logs with a minimum 8 inch top in lengths of 8, 10 and 12 feet. Roof systems for homes normally are made with spruce, so it buys spruce logs with tops ranging from 6-15 inches up to 40 feet long.
The company has two mill facilities. One houses the new lumber remanufacturing line, and the second plant contains a sawmill as well as remanufacturing operations.
In the sawmill, a Renco circle head saw breaks the logs down into cants, and a Wood-Mizer portable band sawmill also is used for milling logs. Some cants are resawn on a single-head Baker Products horizontal bandsaw into dimension lumber for decking or paneling. Other cants go through a gang-rip to be sawn usually into 1-inch or 2-inch material that will later be remanufactured.
Slabs removed by the head saw are used to make siding. They are processed first by a moulder. If the siding is to be sawn, it goes through the Baker resaw. The paneling may also be sanded. The siding is inspected and defects marked with a piece of chalk. The chalk mark is ‘read’ by an automated machine that cuts out the defect, and the siding is then end matched. If the product is log siding, the final process is a German-made machine – the company is equipped with three of them -- that peels off the bark. (The same type of machine is used to remove bark from rail stock.) The siding is then ready to be kiln-dried.
The remanufacturing operations are equipped with three moulders – Weinig, Newman and Watkins machines.
Barnette also designed, engineered and built a specialty machine for forming saddle notches for log home corner components. (Town & Country offers other types of corner features and construction.)
Saw blades and service and notching and moulding tools are supplied by Michigan Saw & Tool.
The company’s residuals are sold to two markets. Bark is sold to a company that uses it to make mulch, and sawdust is sold for animal bedding.
“I think one of the biggest reasons for our success has been the focus of the company on Northern white cedar,” said