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Former Employees Who Purchased Closed Virginia Sawmill Find Success by Focusing on Quality
Franklin Lumber: Focusing on grade lumber and high quality production, former employees purchase and restart Virginia sawmill. New owners explain the process of reopening an idle facility and things to keep in mind when evaluating business opportunities.
By Lisa Monroe
Date Posted: 7/2/2015
Focusing on grade lumber and high quality production, former employees purchase and restart Virginia sawmill. New owners explain the process of reopening an idle facility.
When a sawmill that had been run by International Paper (IP) sat empty in Isle of Wight County, Virginia after being shut down in the summer of 2009, several men who had been associated with the mill at different times saw an opportunity that was too good not to pursue.
Almost two years since the mill reopened in late 2013, former employees are now owners and partners in Franklin Lumber. The facility today produces about 60 million board feet of lumber annually and focuses heavily on producing a quality grain. The majority of the lumber, which is all produced from southern yellow pine, is made to be shown off on decks and other treated surfaces. So the grain is important and that’s why 85% of the lumber the mill produces is Grade 2 and better.
In addition to being successful, leaders of Franklin Lumber have also found the satisfaction that comes from owning their own mill, in knowing that they’ve put jobs back into the community and are carrying forth a long-time tradition. There’s been a working sawmill on the 14-acre site of this mill since 1887.
The Camp family first built a large forest resources company on the property, and then in 1999 Union Camp merged with IP and continued the sawmill and paper mill operations until 2009, when the sawmill was closed.
“It’s definitely different. It’s definitely more enjoyable,” said co-owner Carl Buck, of owning and running a business. “I guess the best thing about it is that we don’t have all the hierarchy.” With large companies there can be layers of management, sometimes these managers are offsite far away in another state. This distance can add to the time it takes to get things done to the detriment of the business, he explained.
“A lot of times I’ve seen missed opportunities by delaying the decision process for so long, but we can streamline that and get things done quickly,” Buck added. “We have that decision making capacity right here among us. We talk about it and can make a decision in the turn of a dime.”
Buck was mill manager when IP shut down the sawmill six years ago, and stayed on to help the company maintain the property after the closure. He’d started working at the mill under Union Camp in 1984, and stayed for over ten years before managing a nearby mill in North Carolina for 12 years, before returning to the Franklin mill.
After he and partners Perk Taylor (CEO), Terry Godwin (CFO), and up until recently a silent partner, E. Warren Beale, purchased the business, Buck was instrumental in getting the mill in working order again.
Purchasing the mill was a long shot, according to Godwin, because there were other larger sawmill companies looking at the property. But Godwin and his partners still began negotiations with IP and also began talking to banks. In the end, they were able to purchase the mill, and even received a small grant from the Virginia Governor’s Agriculture and Forestry Industries Development Fund and some incentives from Isle of Wight County.
“IP was great. They’ve been tremendous help, and we’ve thoroughly enjoyed working with them,” said Godwin, who explained that IP in 2006 was getting out of the sawmill business completely and had sold other mills to West Frasier, which did not purchase the Franklin mill.
Although the new owners didn’t plan on changing the mill’s processes a whole lot, there was still a lot of work to be done for the mill to reopen in 2013 because the equipment had not run for around four years. The paper mill next door, owned by IP, had removed some of the equipment from the mill.
“There was some computer programming that was specific to this equipment that was gone, and we had to scrape around and try to find new backups,” said Buck. For assistance, they called in USNR, the manufacturer of most of the log breakdown equipment in the mill – including the sharp chain for primary breakdown, the canter for secondary breakdown, the resaw, the carriage which handles the larger higher quality logs for making value added products, and the edger.
“USNR was very helpful” in getting the equipment up and running, and its personnel assisted with some slight modifications. “We upgraded by adding some variable speed drives to the sharp chain outfeed and some variable frequency drives on our log bucking.”
“It gives you better quality and increases your throughput,” said Buck. “You can slow down when you need to for larger logs and speed up for smaller logs.”
Buck also had to call in Lucedyne, which manufactured the system used in the planer mill for grade marking and sorting, because the computer equipment that automates that machinery was also missing. “When a lot of equipment is missing it throws a monkey wrench in the whole process,” he clarified.
All the equipment in the mill is fully automated. The process starts by debarking the logs, which are then sent to the primary breakdown on either the carriage or the sharp chain machines based on size. The carriage will break the logs down to a center cant, which then goes to the resaw while the sharp chain opens up two faces. The two side boards are then processed by the edger, and the center cant will move onto the canter. The canter opens up the other two faces and sends the center cant onto the resaw. All of the boards then exit the sawmill through the trimmer to get the correct length on each board, and the boards are sorted into 72 sorter bays before being stacked for the kilns.
Logs are scanned as they are on the way to being cut and then the saws adjust to optimize the cut. While automation is key to running all the equipment at Franklin Lumber, employees are very important as well.
The new owners made a strong effort to bring back past employees who had lost their jobs when the mill closed. They were able to hire back about 40% of the employees that had worked there before. “Most had jobs, but they wanted to come back,” Godwin said. “I heard a lot of them say they just wanted to come home.”
Being able to bring back seasoned employees was a great asset to the mill, he said. Not only did they know how to run the equipment, but they could help train new employees. Also the mill had a very good safety record when it closed, and Godwin knew the employees that were being re-hired would help to enforce the safety record. One of these employees was safety manager Mary Ann Howell, who they were able to hire back.
“We do a tremendous amount of training,” said Godwin, whose office sits in the second story of a large training center at the mill. “We work closely with our insurance companies, and they’ll see best practices that they pass on to us, as Virginia OSHA does as well.”
With its 65 employees, the mill runs one shift now, which the owners find easier to manager, whereas under the former ownership, the facility ran two shifts.
The mill also works with a lot of the same area loggers as it did previously, with 90% of its logs coming from within 40 miles of the mill. “We have a core group of very good loggers that we work with to produce very high quality logs. You can’t produce a good board if you don’t start out with a good log,” Godwin said.
The company also purchases logs that are certified sustainable through the Forest Stewardship Council. TradeTec software is used by the company for log purchasing and payments, lumber inventory, and shipping and invoicing.
“We saw an appearance grade board,” Godwin said, with the biggest customer segment being treaters that treat lumber for outdoor use. “Within a grade, we’re above grade or at the top of the grade.”
The company’s slogan “Quality Across the Board,” fits well with the company’s mission. The quality focus is very intentional and a niche for the company even though its yield is lower for the same tonnage of logs because it cuts logs for appearance not to produce the most lumber from each log. Godwin said, “We want to produce a quality board, and we want a loyal customer base.”
Many of its customers are to the north, giving the mill a freight advantage to northern markets over its southern competitors, since Virginia is the northernmost range for southern yellow pine.
The company is currently looking to expand farther into the northeast and is also open to exploring new markets, Godwin said.
Franklin Lumber’s product currently includes two-inch boards ranging from 2x4s to 2x12s, 4x4s and 4x6s. The company is also looking at producing 4x5s which are used by some markets including some pallet manufacturers. “We’ll adjust the product mix based on the market,” Godwin said. “We’re open to looking at new products a customer may need.”
Today, Franklin Lumber can count IP as one of its customers. When it re-purposed its paper mill in 2012, the paper company had a need for wood chips, which today it gets from its neighbor.
In fact nothing at all goes to waste at Franklin Lumber. Besides selling the wood chips to IP, the sawdust and shavings are sold to area pellet mills; the bark goes to nearby power plant or biomass facilities; and some also is used by customers that bag it for mulch.
Godwin, who has about 20 years of experience in forestry and procurement, also has two degrees in Forestry Business and Forestry Management. He was working as a consultant when Taylor called him about the sawmill venture. Taylor knew Godwin had formerly worked for IP in Franklin, having left in 2003.
Taylor, now CEO, oversees the current business and provides engineering and business expertise. He began his career with Union Camp at the Franklin mill as an assistant division engineer, and was then promoted to and served as plant engineer there until 1989. He then started a separate construction and worksite company, W.P. Taylor & Company, which he still runs today.
Godwin said he loves being a mill owner. “I like this because from this window I can see the logs coming in,” he said looking out the window of his second-story office which overlooks the main entrance to the mill.