RED OAK, Virginia — Dream big, accomplish much. The lesson that big ideas lead to big achievements isn’t lost on Ken Morgan, owner of Morgan Lumber.
Morgan Lumber manufactures pine lumber. One of Virginia’s leading pine sawmills, it produces a large volume of decking and other products, including low-grade lumber for pallet companies. The company has drying operations and planing operations to produce high quality kiln-dried lumber products from Southern Yellow Pine.
The company partnered in recent years with another business to bag the shavings from its planer mill for eventual sale to horse owners. “We believe in diversification when it complements the core business,” said Ken.
Morgan Lumber was started in 1939 by Ken’s grandfather, J.C. Morgan, who started cutting lumber with a ground mill. The company is located in the tiny rural community of Red Oak, which is in Southside Virginia. The hamlet is north of Kerr Reservoir and about 50-odd miles east of Danville.
“They called it a ground mill because it was portable, and it sat right on the ground,” Ken said. “He would buy a tract of timber, move in, cut the tract of timber, and then pack the mill up and move it to another site.”
In that era, Ken’s grandfather cut whatever species was available. “If it was predominantly oak, they might cut railroad crossties,” said Ken. “If the tract was heavy to pine, framing lumber was cut. It was very labor intensive.”
J.C.’s sons — Ken’s father, Billy, and uncle, W. C. — joined him in the business. They saved enough money from raising tobacco to buy a simple sawmill.
After completing four years of service in the Navy in 1945, Billy began a leadership role in the sawmill. By the late 1950s, he led the company’s growth to two small stationary sawmills, a planer mill and a building supply store.
“In 1971, right out of college, I was in the Army Reserves,” Ken recalled “That was kind of the wind-down era of the Viet Nam conflict, and I had a low lottery number, so I joined the Army for basic training and advanced infantry training.” When he returned, he went to work in the mill in addition to cruising timber.
In 1981, almost 10 years to the day after Ken came to work in the business, his father was killed in a farming accident. Ken took over the company.
“My first reaction was that I didn’t want to try to sell finished lumber and oversee a planer mill in addition to a sawmill,” he recalled. “But I remembered my dad telling me that most of the opportunity for profit was in finished lumber. I kept thinking about that when I was considering what to do.
“It was also the time of the year when a lot of farmers sit around those big pot belly stoves and talk. Word got back to me that they were saying, ‘That boy will never make it without his dad.’ ”
Those comments brought out the fight in Ken. “I remember going home and telling my wife, ‘If it kills me, I’m going to make it go,’ ” he said.
He did, too. Ken continued to invest in the company and automate as many processes as he could. He also invested in hiring employees and providing them with good benefits, such as fully funded health care.
“I’m a believer in investing in human resources and quality people,” said Ken. “We continued to build the strong team that was already started.” Morgan Lumber today employs six college graduates.
“It’s kind of unheard of for a family business in this part of the country to have that many college graduates,” Ken noted. “Big companies have plenty of people with higher education, but it’s rare for a business of our size. We just have a lot of good, committed people here, and that’s why we’re doing okay, even as tight as the market is today.”
Ken built a new sawmill in 1988. It was a state-of-the-art mill at the time. “We invested in optimization and labor saving equipment,” he said. “We installed sorters at both the sawmill and the planer mill and automatic stackers in both mills.”
The sawmill is contained in a metal building 150 feet by 180 feet. In the log yard, logs are loaded onto an infeed conveyor and are bucked and then pass through a USNR Cambio 30-inch ring debarker. A metal detector alerts to any logs with metal contaminants, and a custom, shop-built device automatically marks the area of the log with paint so it can be cut out.
“Our previous sawmill manager is an electrical engineer,” Ken said. “He designed a device that calculates the speed of the conveyor, then an air-operated gun shoots a spot of paint onto the log where the piece of metal is located.”
Inside the mill, there are two primary breakdown systems. Larger, rougher logs are kicked to a deck that feeds a traditional head rig, a Corley three-head block carriage and circular head saw; the head rig primarily squares up two sides of the log. Smaller logs go to a Mac Top Dog center carriage system optimized with USNR’s 3D LASAR scanning and optimization technology; after chipping heads make the initial cut, twin carbide-tipped circle saws can remove one or two side boards – whatever the optimizer dictates – to produce a two-sided cant.
The two-sided cants from both breakdown systems are transferred to a Ligna 10×60 thin kerf, laser-guided gang saw. The boards produced by the Ligna gang are transferred to a Hi-Tech optimized edger with a reman top head.
“When lumber transfers through the optimizer, the camera sends the information to the computer, which goes through a hundred or so options for size and length for the board and selects the best option,” Ken explained. “It’s a pretty neat machine that optimizes the value of the lumber that’s processed through it.”
The next step is a Hi-Tech optimized trimmer, and then the lumber is sorted automatically by a Hi-Tech 50-bin sorter. The sorter is some 2-1/2 stories tall. At the time it was installed, the supplier told Ken it was the tallest system they had installed in the U.S.
Filled bins of lumber are transferred to a Hi-Tech stacker to be stacked with sticker strips for kiln drying or stacked solid for direct shipment green.
Morgan Lumber added a dry kiln in the 1990s. The kiln is a USNR-Irvington Moore double-track system with steam heat and a wood-fired, 500 hp boiler. The kiln, computer-controlled by the USNR Kiln Boss system, is adjoined by an office and two cooling sheds, one on each side of the kiln. The dry kiln has a capacity of 100,000 board feet of 7/4 lumber.
In 2006, disaster struck: the entire planer mill was destroyed in a fire. “It was devastating,” Ken said. The entire mill was only 11 years old.
What saved the company was action by Morgan’s competitors. “One message I wish that the whole nation could hear is that this is what Americans do — we rally to help one another,” he said. “We’re competitors, but some of the closest friends I have compete with us for logs or lumber.”
Within hours of the fire, Ken began getting phone calls from competitors, offering to help. “We had two other companies (Amelia Lumber Co. in Amelia, Va. and Gibson Lumber Co. in Gretna, Va.) planing lumber for us so we could continue serving our customers,” he said. “We transported our planer crew to those other operations and ran through weekends. Fortunately for us, one of these operations had a planer mill with capability that far exceeded the production level of their sawmill, so their planer mill was sitting idle a couple days a week, and we could use that time. Again, these were people who were our direct competitors. They opened their doors and said, ‘What can we do to help you?’ ”
Ken was overwhelmed by the generosity of the entire industry. “We’re a member of the Southeastern Lumber Manufacturers Association, which covers a 15-state area. People from many other states called us and asked, ‘What can we do to help?’ ”
Ken recalled one company owner who called with an offer to help. “He said, ‘Ken, I just purchased a trim saw that I haven’t installed. If that would help you get back up and running sooner, you are welcome to take it and use it until you take delivery on one. Then just pull it out and send it back to me.’ ”
In fact, so many people offered help that Ken was reluctant to name any of them for fear of leaving someone out.
“I was just very grateful for everyone who offered to help, and especially to the two companies who ran lumber for us,” he said.
The new planer mill, housed in a 125-foot by 300-foot metal building, is state-of-the-art equipped. Rough sawn, kiln dried lumber is broken down on an ASM high-speed tilt hoist. The lumber then passes across a Wagner inline Apex moisture monitoring system to ensure that each piece has been properly dried.
The planer line was supplied by Newman-Whitney Machine. The feed table, bridge, and planer are all electronically driven, and the line can achieve speeds of up to 2,000 linear feet per minute. The lumber passes first through an MDI TWA-2000 planer series metal detector, which can detect small fragments of metal, such as broken staples. If metal is detected in a board, it can be removed without interrupting production; the defective board is picked up and kicked off so the next board can continue through the line. MDI metal detectors, which are manufactured in the U.S. and can be customized for any application, provide protection against downtime associated with damaged planer blades. The planer itself has 20 knives and produces an excellent finish. After surfacing, certified graders then grade the lumber, marking each piece with florescent crayons. The marks are scanned and interpreted by a Lucidyne grade mark reader. Each piece then is conveyed to a USNR Line-Shaft trimmer that is optimized; each board is scanned by the USNR system and trimmed automatically at 1-foot intervals.
The finished lumber passes under a Claussen All-Mark printer that uses the information from the Lucidyne grade mark reader to stamp the proper lumber grade on each board. Claussen All-Mark specializes in grade printing equipment for lumber and panel mills, and it supplies reliable, heavy-duty, high-speed grade printing equipment for all types of mills. The company also offers painting systems, specialty printers and accessories.
The lumber continues to a USNR 30-bin sorter. A USNR high-speed lumber package maker accumulates the lumber, and the packages are squeezed and strapped by a Signode fully automated banding station.
USNR, which also supplied a Quad Cam board feeder, was a key partner in the project and getting the planer mill equipped and operational. “There were very few equipment vendors that could meet the deliveries that were required,” said general manager Don Bright. “USNR stepped up to the plate and met a remarkable schedule.” USNR’s Hot Springs division worked overtime to deliver the project on time.
“Our main product is 5/4 radius edged decking,” said Ken. “That really is our niche.” Decking, which represents about 70% of the company’s production, is sold primarily to lumber treating companies for eventual sale to ‘big box’ home improvement stores.
“We don’t do any pressure treating here,” Ken said. “We have contracts with treaters, and we supply them ‘x’ amount of volume per month of both premium and standard decking.”
The company produces a wide range of other products, including framing lumber. Low-grade lumber is sold to the pallet industry. “As long as I can remember, we’ve furnished lumber to companies building pallets,” Ken said. Pallet suppliers remanufacture the material into deck boards and stringers.
Morgan Lumber’s main source of logs is ‘gate wood.’ “We buy both tree length and cut to length logs,” Ken said. The company also buys standing timber and contracts with loggers to harvest the trees.
Given that raw material is such a large cost for sawmills, Ken is putting added emphasis on log quality. Don Bright, general manager, promoted the concept of creating a position of a forester to inspect incoming logs. This was realized in mid-2007 and has been most successful.
Residuals are an important aspect of the business. A few years ago Ken was sought out by a Canadian businessman looking to expand a company that sells wood shavings for horses. The two exchanged information and met, and eventually they forged a growing partnership.
Ken added operations to the facilities to bag shavings and already is expanding it. “Right now, we bag 18,000 bags a week,” Ken said. “We palletize and shrink wrap probably 99 percent of the shipments from that operation.”
Waste material is collected and directed by vibrating conveyors to a Fulghum 60-inch chipper. Two MDI metal detectors protect the chipper from metal contaminants.
When he talked with Pallet Enterpise,, a contractor was starting work on another project. “We’re pouring concrete to start an operation for making wood shavings from pulpwood,” said Ken. “That will support our bagging operation and in addition we’ll sell bulk tractor-trailer loads of shavings.”
Scrap wood is chipped, and the chips and sawdust are sold to other markets.
Morgan Lumber’s output has been stable for about the past five years. The company ended 2007 cutting just over 26 million board feet. “We really need to do about twice that to continue to be competitive,” said Ken.
He plans to continue making investments in the business to keep it competitive. “We’re planning to install two machines that will almost double the production in the mill without requiring more labor,” he said. “All we’re waiting for is to see a confirmed signal that the economy is improving before we commit to the investment. We’re going to add a new style, state-of-the-art optimized gang and a sharp chain. They will process about 15 logs a minute. I think we can double our production without adding any employees or perhaps just one.”
Even though the economy has slowed and the weak housing industry has dampened the forest products industry, Ken is optimistic and gauging the right time for the next upgrade to the mill.
“We don’t think any sustained recovery is going to take place until the spring of 2009,” he said. “We want to get a little closer to that time, and confirm what we feel right now. Ideally, if we can install this equipment and have it up and running just as we come out of this slump, it couldn’t be timed better.”
The biggest challenge to the business is international competition, said Ken. “We need to convince our legislators that we must compete on a level playing field to be able to continue in business. Other countries do not have the regulations that we have here in the U.S., and unless a tariff is put on their imports, we just will not be able to compete equally with them and stay in business.”
Ken is also preparing for a transition to retirement. Don Bright is in charge of operations. John, Ken’s son, is sales manager. Other members of the management team include office manager Clarissa Ferrell, sawmill manager Jim Henson, planer mill manager Jonathan Hazelwood, forester manager Michael Elliott, and shavings manager Curtis Duffer. The average age of the management team is 38.
“They all allow me to place myself in a position of retirement,” said Ken. “I’ve told these younger folks that when I’m 65 in five years that I’m just going to stop by and visit once in a while.”
The management team and the other employees are a key reason for the company’s success, according to Ken. “The strength, quality and unity of our employees, I believe, give us a competitive advantage.”
The best thing about being in the forest products industry, Ken said, is the integrity and quality of the people he has met along the way.
“If I was 22 and getting out of school and knew what I know now, I would do it all over again,” he said. “Even knowing the hard times and trials of this business, because of the quality of people I’ve met and the friendships I’ve developed over the years, I would go the same route all over again. I’m honored to be in this industry.”
