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Oregon Man Discovers Small-Scale Milling Is A Strong Market Niche
Oregon man discovers that small-scale milling is a strong market niche; recycling old building timbers keeps his Wood-Mizer portable sawmills going.

By Jack Petree
Date Posted: 3/1/2000

MULINO, Ore. — Kevin Kaster had no idea his entire life was going to change when his father-in-law bought a Wood-Mizer LT-40 portable sawmill some seven years ago.

As a result of his father-in-law’s decision, Kevin now is self-employed with a small crew helping him mill a variety of products for both the custom and wholesale marketplace. He has two Wood-Mizers that are on constant call, and his business is growing as rapidly as he will allow it.

Kevin has discovered, as have many others, that small-scale milling is a strong niche in the market and can be a very profitable enterprise in the forest products industry.

Serendipity played a big role in his business. Before starting out, Kevin worked for his father-in-law, doing maintenance on the family properties. As recounted by Kevin, a large fir tree blew down on his father-in-law’s tree farm, but it was much too nice to saw up for firewood. Looking for some alternative uses for the wood, Kevin and his father-in-law discovered portable bandsaw mills. "We went around and looked at a variety of mills, and he ended up buying a Wood-Mizer," recalled Kevin, originally a welder by trade.

His father-in-law bought the machine in the early 1990s. "He figured the mill could be used as a supplement for times when we weren’t busy with maintenance on the properties," said Kevin. "It would be a way to make a few extra dollars on the side. We worked together for a while, then ended up parting ways. By the time we parted, the mill business had become an almost full-time occupation for me. I saw that there was plenty of work for another sawmill out there, so I went to my dad and asked if he wanted to go partners on a mill for ourselves." His father agreed, and they went into business together.

Because Kevin’s experience with Wood-Mizer had been so positive, he and his father decided to stay with the same company. "We went together on a 24 horsepower LT-40 Wood-Mizer," he recounted, "and we’ve been busy ever since."

Portable sawmills are becoming an increasingly important part of the forest products industry. Robert W. Hagler, president of Wood Resources International, addressed an audience at the Wood Technology Clinic and Show in Portland, Ore. last year. The forest products industry is stratifying, he told the gathering, with large producers controlling the traditional markets and "...a layer of niche players supplying local markets or providing specialty products the large firms are uninterested in." Kaster’s Kustom Cutting Inc., the business Kevin and his father started, is an example of the kind of niche player that Hagler was describing.

"There’s a real demand for our service out there," said Kevin. "Once you do a job or two, people find out about you and the calls start coming. We run a line ad in the Yellow Pages and that’s about all we do for advertising. It seems as though we keep busy all the time just off word of mouth. Contractors, homeowners, and all kinds of other people have trees they want cut for lumber, and the recycle market is growing. There’s actually a lot more work out there than we can get to."

Most of the jobs that Kevin got initially were for milling trees into dimension lumber for individuals. However, soon after he began milling full-time, Kevin was summoned for a job that has resulted in a steady stream of work since, and it continues to grow.

The business is based where Kevin lives near Mulino, just a few miles outside of Portland. Criss-crossed by rivers, Portland has been a sea port for more than 100 years. The city has many old warehouses, bridges, and other structures that were built in the 1800s. They were made with construction techniques that called for using massive timbers sawn from the original forest, some of which was old-growth. Now, as these aging structures are torn down or replaced, there are opportunities to reclaim and recycle the high grade timber and to use it again for other purposes.

One of Kaster Kustom Cutting’s early customers was a manufacturer that bought the used timbers and contracted with Kevin to saw them into blanks to be processed into high quality hardwood and softwood flooring. The job went well. "I ended up cutting for at least two weeks out of the month for him," said Kevin. "Then, he wanted to kick up his production even more."

The added business put Kevin on the horns of a dilemma. He didn’t want to turn down the additional work, but neither did he want to drop his other custom milling jobs. "Once you get a ball rolling, you hate to let it drop just in case the new business doesn’t continue," he explained. "You don’t want to have all of your eggs in one basket, which is the position I would have been in. He wanted me for three weeks a month, which only leaves a week a month to keep everyone else happy. Most people, once they’ve decided they want you to saw something for them, don’t want to wait for three weeks or more for you to come out, so I wouldn’t have been able to keep everyone else happy." Kevin also wanted eventually to expand his business to include stockpiling and selling new and recycled lumber.

The solution was a second portable sawmill. He invested in another Wood-Mizer LT-40 but with a bigger — 36 hp — motor. Kevin’s brother joined the business full-time so that both mills could be run at the same time and for jobs where two men are required. The addition of the second mill increased production capacity and also gave the company more flexibility and improved ability to serve customers.

The additional production capacity of the second mill was an obvious advantage. However, the most important advantage it brought was greater flexibility in serving customers, according to Kevin. "We’re not running both mills full-time by any means, even though we could," he said. "And that works out really good. If somebody has something that’s here and they’re in a hurry, one of us or both of us can get in and get the job done for a customer without having to tear the mill down on another job in order to do it. That saves us a lot of time and it keeps the customer happy. With two mills you can pull into someone’s place, work, and then, if you have to go work on another job, you can leave the mill in place and go do that job. If you have to pull out of someone’s place in the middle of a job, they worry about whether you’re coming back or not, but if you leave the mill, they’re not worried about you coming back. You can take a couple of days off and work on another job."

Another advantage of having two mills is that it saves time when the company is working on multiple jobs. "Contractors never seem to know they need a product until the day after they need it," Kevin said. "If you have to stop and tear down the mill to go off somewhere else, you can waste several hours just getting ready to move out. If you can just move the second saw to the new job, you’ve gained a lot more flexibility and you’ve saved a lot of money because you’re sawing instead of tearing down, setting up, and then tearing down again to go back to the original job. Then when you do go back to the original job, everything is set up and waiting. You don’t have to start all over again."

With two portable sawmills Kevin also was able to take his business more fully into the recycled end of the industry, a market for which the machines are particularly well suited. "We’ve started running flooring now out of the recycled stuff for ourselves, instead of just sawing and selling the blanks to someone else. With two mills we can concentrate on that and still do the custom jobs we built our business on."

One recent custom job illustrates the versatility of portable sawmills. Although many of the old buildings in Portland are being torn down or replaced, others are being reclaimed and renovated. For example, a former cold storage warehouse was transformed into offices for an advertising agency. Plans called for integrating the old Douglas fir timbers used in the original construction into the new offices. Kevin and his Wood-Mizer were called in to reclaim the timbers with minimal waste.

The job was an example of the roundabout route that referrals sometimes take before they get to the operator of a portable sawmill. The general contractor on the job was R&H Construction, a diversified, progressive company in the Portland area.

During the initial phase of the project, hundreds of old timbers were removed and stored under the Broadway viaduct bridge. R&H was looking for a way to mill the timbers when

they were contacted by Ed Mays of Endura Wood Products. "Actually, I had my eye out for reclaimed timbers," said Ed, whose company locates, processes, and sells reclaimed flooring and lumber. Ed had worked with a number of portable sawmill operators on other projects, and he brought Kevin in on the job.

R&H had reservations about the ability of a portable sawmill to do the work. "They weren’t familiar with the sawmilling process and were concerned about the quality of the Wood-Mizer," Ed said. "But after showing them the initial cut, they were pleased."

R&H site supervisor Greg Mockford, who oversaw the cutting for R&H, agreed that his quality standards had been met. "The mill seemed to do a very consistent job on cutting rough dimensions," said Greg. "There aren’t any visible saw marks. It’s not a finished, planed product, of course, but if you’re looking for the rough-sawn look, it does a good job. And I had not seen something that portable before."

R&H was pleased with the cost, too, according to Kevin. "We ended up cutting 45,000 board feet," he said. "Mostly 8-by-14 beams that will become bleachers for customer presentations." The finished price for the customer, including sawmilling and planing, came to less than $1 per board foot, he indicated.

With two sawmills running and demand for milling services increasing, Kevin has been able to grow his company into a broad-based business that easily supplies a good income for him and his brother. A percentage goes to his father, too, who helped finance the business and still sharpens blades. "There’s not enough for three full-time employees right now," said Kevin, "but we’re pushing on it."

"You get to a certain point where you’ve either got to jump or not," he added. "We’re doing flooring ourselves right now, and we could almost use another part-time guy just on that, cutting and grading. That’s something we have to look at."

Kevin moved into flooring to increase profits. Secondary processing adds value to raw lumber, he noted. "We can make a fine living going out and milling trees," he said. "But that means you’ve got to put in your 40 hours, or 60 hours, or whatever it might be, every week, week in and week out. With the flooring, or even other recycled materials, you can make a little higher profit and you don’t have to work as long."

While he has been able to make a good living with his Wood-Mizer, Kevin pointed out that there are challenges for anyone who wants to get into the business. "Pricing is a process in itself," he said. "Each job is different, and you have to figure those differences in. The customers don’t understand that if you hit a couple of nails, it’s going to cost you a blade. If you’re cutting the wood for yourself, you also have to know what you’re going to be selling the wood for. On recycled wood, you have to calculate nail pulling as well as saw time. Those are things that come with experience, and you have to learn them in order to make a profit."

Because of the learning process of accurately estimating jobs, Kevin advises anyone who is considering buying a portable sawmill and starting a business with it to avoid bidding on work. "I don’t bid jobs and I don’t recommend it," he said. He prefers to price jobs according to an hourly rate. "I do a contract with everything clearly spelled out and itemized. I have a set-up sheet so the customer knows how the milling site has to be set up so everything is known in advance. The customer knows what the cost of bucking will be, what it will cost if I hit foreign material in the wood, and how much per hour the job will cost. There’s a lot less misunderstanding that way, and the customer also comes out ahead. If you have to bid a job, all the possible problems have to be bid into the price. If a job is set up properly, the customer actually comes out ahead when we’re working by the hour."

His hourly rate is $50 per hour for himself and the machine, $60 if he adds a helper. He encourages customers to pay for the added cost of a helper because the job will go faster and save them money overall, and a helper makes the work easier for him. "The customer gets the job done faster and I don’t have to pull boards all day."

Family can be an important factor in the success of a small business like his, Kevin noted. "My wife, Karolyn, does all the taxes and other paperwork, does proofreading of contracts, and talks to customers on the phone. I just can’t imagine how I could ever do that, and it would take a lot of the profit out of the business to hire someone. Even if you could hire someone, they wouldn’t care about it or do it as well as she does. She has been a very important part of whatever success we’ve had."

Being self-employed with the portable sawmill also helps keep the family together, Kevin said. "My oldest son, Daniel, worked last summer, pulling nails and doing other work while my younger son, Stephen, helped with clean-up of sawdust and other chores. It allows us to be together more than we could be otherwise."

The modern forest products industry is changing. As it changes, portable sawmills are gaining importance. Kevin Corder, a spokesman for Wood-Mizer Products Inc., the manufacturer of Kevin’s portable sawmill, said the company has sold more than 21,000 machines. Together, the Wood-Mizer portable sawmills produce over 200 million board feet of lumber annually, he estimated.

As Kaster’s Kustom Cutting has shown, the work is there for an ambitious person who is willing to work hard and to adapt to the marketplace. "We’ve doubled every year on income since we started," Kevin said. "We’re paying the bills, and, most important, we’re having fun. We think this is a great business to be in, and I don’t see any end to the potential in it."

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