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West Va. Forest Products Survives Market Shift With Transition to Specialty Pallet Stock: Serves Industrial Lumber Users
West Va. Forest Products: Company survives market shifts by transitioning into manufacturing specialty pallet stock; W. Va. Forest Products positioned to serve industrial lumber users.
By Diane M. Calabrese
Date Posted: 4/1/2007
BUCKHANNON, West Virginia — Add value to raw material and establish long-term relationships with both the supplier and distributor ends of the economic chain. That sums up the business philosophy of Jim Hinkle, president of West Virginia Forest Products LLC.
“West Virginia has always been a state that exported its raw material to let value be added elsewhere – Ohio, Pennsylvania, North Carolina” beyond, said Jim. He wanted to change that equation and help his state thrive. “We take the lowest common denominator material and add value, keeping jobs here,” he explained.
Long-term relationships make it all possible. Jim seeks long-term relationships with not only his employees but also the customers and the supply chain.
West Virginia Forest Products makes specialty lumber and components for pallets and wood packaging. The company also has a division that manufactures split rail fencing. The business, with about 75 employees, is situated on 10 acres and has three plants, four warehouses, two offices and a maintenance shop – 75,000 square feet under roof in all.
Even when market conditions have shifted, West Virginia Forest Products (WVFP) has been able to adjust and keep going strong. Seven years ago, WVFP began processing 3-1/2-inch poplar cores into a 2-1/2-inch or 2-3/4-inch wood packaging product. The company obtains the cores from a Weyerhaeuser mill. Originally, WVFP processed them into a fencing product. “We had to find another application” when markets shifted, said Jim.
The cores now are processed on a production line that combines a Pendu descrambler infeed, a shop-built scragg mill and a Pendu 40CM gang saw. The finished dunnage is available with banding grooves.
The scragg mill and certain other equipment were designed by general manager Dane Moore, who also oversaw the fabrication and construction. Dane, who graduated from West Virginia University with a degree in forestry, is a skilled millwright and metal fabricator. In addition, Pendu Mfg. helped WVFP modify the 15-year-old Pendu gang saw, which was converted from diesel to electric when the scragg mill was added.
Pallet stock and wood packaging components are produced in another plant that is set up to remanufacture cants and low-grade lumber. It is referred to as the Brewer building because the shop is equipped with a Brewer Inc. Golden Eagle 120 gang saw. The plant also is equipped with an Alden (now Danco) gang saw, a Rojo rip saw and a Samuel Kent Baker Corp. cut-off saw and single-head bandsaw.
The company uses four types of raw material to make pallet and wood packaging components: 3-1/2x7-foot cants, which are primarily a mix of poplar and dense hardwood, 6/4x6-foot poplar; 9/4x7-foot poplar; and 3x6 poplar and basswood.
The company manufactures components for pallets and wood packaging. For example, WVFP makes 82-inch and 86-inch deck boards and stringers ranging from 30 inches to 121 inches for a certain customer.
Ninety-five percent of the raw material that enters the WVFP yard in Buckhannon comes from West Virginia sawmills. WVFP buys raw material from such leading hardwood lumber manufacturers as Allegheny Wood Products, Coastal Lumber, Columbia Forest Products, Cranberry Hardwoods, Jim C. Hamer and Gilco along with about 20 other, smaller hardwood sawmill businesses. Buckhannon, a town of 5,900 residents, is the seat of Upshur County in the east-central part of the Mountain State, and supplying sawmills are located nearby.
WVFP dates to 1929. Jim’s grandfather founded the business, and his father, J.D. Hinkle II, ran it until his death in 1986. After working for the new owners in the mid 1980s, Jim left the business for a time. He worked in the plastic pipe industry, wholesale distribution and retail convenience stores. Ultimately, Jim brought WVFP back to his family in 1991. It seemed the natural thing to do in light of his commitment to wood products. “I believe I had wood fiber in my blood,” he said.
An alumnus of West Virginia University (WVU), Jim is an industrial engineer by training. In his 15 years at the helm of WVFP, he has seen the company grow from one plant that manufactured split rail fencing to its three facilities producing two overall product lines.
The split rail fence portion of the business is still running strong, currently operating with two shifts and producing the equivalent of 7 million board feet per year. Capacity is 12 million board feet.
The fence division operates under the registered trade name West Virginia Split Rail and has a unique web site (wvsr.com). WVFP also has a web site (wvfpi.com) that promotes the company’s products, which also include heat-treated industrial grade parallam and microllam.
West Virginia Split Rail (WVSR) has been made continuously at WVFP since the inception of the company. The fencing is sold to some of the biggest home improvement retailers in the nation. It is also distributed by such companies as Merchants Metals, Universal Forest Products, Great Southern, Riverhead Builders, Culpeper, Rocky Top and Master Halco.
Fence rails are made from poplar or white pine, and fence posts are made from red pine or locust. To achieve the smooth finish that is the signature of WVSR, the logs are peeled with a Morbark C-16 peeler. A Corley circle mill cuts small diameter logs into pie-shaped sections for rails.
A Pendu rail pointer cuts a rail section to 11 feet and tapers both ends; the finished fencing is treated with a mildicide to prevent mold and mildew, and then it is ready to ship. The specialty rail pointer machine was developed in a collaborative effort between WVFP and Pendu.
Scrap wood, bark and sawdust from all the company’s operations are fed to a 52-inch Montgomery hog, and the grindings are sold to West Virginia’s charcoal manufacturer, Kingsford Manufacturing. The Pendu building and the Brewer building are equipped with vacuum dust collection systems.
Shifting economic conditions and markets require commensurate changes in business strategy and tactics. “Developing…WVFP from a cottage-industry fence manufacturer to a national business based in industrials, we had to convert from a family business atmosphere to a professionally managed company,” said Jim.
To make the transition, Jim and his management team committed to evaluating and reevaluating the best choices for finished products, raw materials, and residuals. For instance, the company once supplied its 25,000 tons of wood grindings and sawdust to businesses that used it for boiler fuel or processed it further into mulch; however, it switched to supplying the charcoal plant, which has a higher demand at this time.
Adapting to changing markets also has required significant capital investment. The company has spent nearly $2 million on new buildings and equipment since 2002, during which time its workforce has doubled.
In 2007, WVFP expects to ship 1,500 truckloads of industrial lumber and fence products; it will sell an equal number of loads of wood by-products.
Two years ago, WVFP invested in a dual-purpose kiln from SII. The kiln has a capacity of 65,000 board feet and uses natural gas for fuel. “We use the SII chamber as a kiln to dry pine split rail posts prior to pressure treating,” said Jim. “We are the largest fence post supplier who dries prior to pressure treating.”
The SII kiln can also be used to heat-treat pallet components, and WVFP is certified by Timber Products Inspection Inc. to supply heat-treated wood packaging material.
Drying and heat-treating illustrate just two ways the company adds value to wood products for its customer.
Other changes are on the horizon. WVFP plans to add a dedicated scragg mill in 2009. One key to the company’s future, as Jim sees it, involves developing ways to process many types of low-grade lumber or other by-products sold by West Virginia’s hardwood mills. The scragg mill will enable the company to capitalize on the strong supply of low-grade logs in West Virginia that sawmills cannot cut profitably.
WVFP is a member of the West Virginia Forestry Association. The company, which employs 75, has a five year goal to increase sales 50%.
Customers that buy specialty pallet and wood packaging components include Universal Forest Products, Hager Distribution, Buckeye Logistics and T.J. Box.
The importance that WVFP puts on long-term business relationships extends to suppliers that help maintain its equipment. Dane works closely with these suppliers.
“Reckart Equipment is a primary source of spare and repair sawmill parts,” said Dane. “Their Elkins location offers convenience and expertise. Applied Industrial is also a key supplier, offering a wide range of components.”
The task of keeping saws and cutting tools humming falls to two important suppliers. “Sharp Tool Company is our number one source for new tooling, and we have repeatedly required them to make custom tooling and sizes for various industrial components,” said Dane. “They accomplish that in stride.” Saw blade sharpening is performed by Stewart Saw Works.
WVFP has a safety program that includes regular training and monthly inspections. Jim credited Mark Vance, industrial operations manger, and Larry Stewart, purchasing and administration, who oversee the safety efforts.
Other key members of the WVFP management team include sales manager Mark Waldo, industrial sales engineer and production planner Keith Barbo, and chief financial officer Mike Loughney.
Roger Tomey, log procurement manager, has been Jim’s right-hand man for 20 years and has helped in every aspect of the company’s operations. He is currently responsible for hauling, construction, raw material supplies, heavy equipment and trucking departments. He is the kind of person who, if you ask him to get it, he can do anything, said Jim.
Jim reflected on recent changes in the forest products industry. WVFP lost its market for panel fencing in the early 1990s to producers in Canada and South America, he noted, as did other U.S. companies. As significant as the market loss was, though, WVFP had an advantage in adapting to changing markets because of its location, which gives it access to Appalachian hardwood forests and major manufactures of hardwood lumber products.
Because of the growth of the hardwood industry in the early 1990s, new mills sprang up in West Virginia. The new mills added to the volume of low-grade lumber, cants, byproducts and residuals that WVFP could obtain as it transitioned from making panel fence to wood packaging material.
The residual material remaining from processing poplar peeler cores into dunnage even has a market; it can be sold to other businesses, such as manufacturers of wood fuel pellets and charcoal.
WVFP has successfully adapted and progressed. The can-do attitude that prevails at the company stems from the legacy of Jim’s grandfather, a self-made man who illustrated how to get things done, explained Jim. It’s no coincidence, perhaps, that split rail fence taps into the do-it-yourself spirit. A shovel or post hole digger, a string and a level are the only tools needed to assemble an aesthetic perimeter of split rail fence.