Steve Wetherby, Business Examiner, June 2, 2008
Globalization is just a new term for an old story: since Europeans were propelled by a host of forces into a world-girding competition for colonies, converts, markets, raw materials, power and glory, communities far smaller and more remote than Port McNeill have seen their own fortunes rise or fall on the ebb and flow of economic tides far away.
Port McNeill Shake and Shingle's fortunes, like so many Vancouver Island forest enterprises, are pegged to the American housing market. When that market was hot, says the company's new owner (and longtime manager) Linda Minihan, the firm has employed as many as 40 in the forests and its mill, where it has added a night shift. And when it's cold, like now, its staff can shrink to 15, and if stays cold another two weeks, “we'll have to cut back further.”
Still, she says, “I'm fairly optimistic over the long term. It's a green housing material that doesn't do damage to the environment.” Minihan bought the firm from local entrepreneur Don Orr last year with a loan from Ecotrust. “Our primary?market is mid to high-end homes?in the U.S.”? ?The sector is experiencing some fallout from the mortgage scandal and resulting housing chill in the U.S., but she figures the enduring appetite of Americans for cedar shake roofs and cedar shingle sided?homes will reassert itself.
Minihan started out in business as a freelance bookkeeper with?several clients: a restaurant, a trucking company, an electronics firm and so on. She was, she admits, utterly ignorant of forestry. “I would see a ‘B-Train' going buy and wonder where all that firewood was going.” (A B-Train is a truck towing two trailers, a rig customarily used to haul timber to mills and not fireplaces).
But 14 years ago she became the bookkeeper at Port McNeill Shake and Shingle. In seven years she became the manager, and as owner Orr's interest shifted to the Black Bear Hotel he was building, her responsibilities grew. Eventually, Orr approached her to see if she wanted to buy the firm. Business was at a low ebb at the time and there was some concern that if she wouldn't take over, nobody would, and the operation might ?close down. “I was concerned for my own job, but also for all the other jobs. Some people have been here from the very beginning,” she says.
But traditional banks weren't interested in loaning Minihan the purchase price, given current sales figures. Community Futures, the local small business development arm of several federal agencies, decided Port McNeill Shake and Shingle wasn't small enough (its ceiling is $150,000), but did give Minihan a brochure for Ecotrust Canada. This environmentally-minded non-profit loaned $1.1 million in B.C. last year, and from its office in Courtenay, it arranged a loan for Minihan.
“They liked what we were doing for two reasons: cedar is an environmentally-friendly material that can go on roofs and exterior walls without painting or staining or any chemicals. And we are salvaging our raw material from forests that were logged up to 50 years ago, or from lower grade logs not used for lumber”.
It's the oil in cedar that preserves it on roofs and on the forest floor. But fibre supply is often a problem, says Minihan, which is why she sought to buy cedar logs?directly ?from the logging companies before they gathered them up in booms and towed them down to Lower Mainland mills.
“It's very hard work for the workers that find and cut?the wood in the forests (which have now had? up to 50 years to overgrow the fallen trees or stumps),” she admits.? The company pays piece-work for most of the jobs in?its operation. Once the wood is?found and cut into blocks, and stacked into four-foot cubes, it is lifted in slings via helicopter to nearby roads, whence it is trucked to the firm's mill.
The company is restricted to cutting in forests that were logged no more than 40 – 50 years ago.? Logging companies are now logging very cleanly, leaving very little material behind.? The Provincial government determines the volume of waste left behind after logging and imposes waste assessments on the logging companies.? Freshly logged areas no longer contain as much salvageable material as in the past.
Port McNeill Shake and Shingle has two FLTC's or “Forest Licences to Cut,” which allow salvagers to take up to 2,000 cubic metres of fibre from an?approved area?over a two-year period. The company is? currently processing about 10,000 cubic metres of cedar annually, from all sources.
Salvage companies have agreements?with long term tenure holders like Western Forest Products to salvage in previously logged areas, and there is lots of competition, with several other mills in the North Island.
Tightening the supply of fibre further is the American housing downturn.
With less?demand for lumber, less logs are being produced.? Most of the logging companies are currently focusing on logging cedar.??There still appears to be a healthy demand for cedar, and the prices of cedar logs remains high.
Nonetheless, she and her workforce,? while scaling back for now,? will keep their enterprise going, waiting for the business cycle to turn upwards, like hundreds of entrepreneurs and thousands of workers all over Vancouver Island. BE