It’s all about the employees.
Federated Co-operatives in Canoe is thriving, and Darrell Embley, vice-president of forest products, credits improvements in the business to his employees.
He said Federated introduced a process whereby employees and management look at and implement changes to improve performance.
“I was very impressed how employees embraced the concept from the get-go…” he says. “I have told them many times how impressed I am with them and how we’re working together to secure the future.”
And it’s been done without layoffs and without capital.
“It’s all process-driven through people and ideas and implementation and working together,” he says.
Although Federated made use of the federal government’s work-share program for a small portion of 2009 – when employees go to a three-day work week and receive employment insurance for the other two days – currently 222 people are employed, all full-time. Of those, 186 are with the plywood operation, 11 in the woodlands division, 17 in administration and eight with the sawmill, which was shut down in 2007, where they carry out duties such as managing fibre inventory in the lake with tugboats. The 2007 closure put about 150 people out of work. Also included in today’s workforce are associated logging contractors and others, bringing the current total to about 320.
Key to Federated’s success in improving the business were increases in productivity. Embley says the plant was producing at a rate of about 460,000 sq.ft. of plywood per day in 2009, a number which, in 2010, increased to an average of over 560,000 sq. ft. per day. As well, the recovery of wood from logs went up five per cent, and costs were reduced.
“We were able to trim fairly significantly – costs were reduced by about 15 per cent,” Embley says, noting that by being able to increase productivity and reduce costs, and build inventory during times of low prices, Federated has stayed viable.
“I know where our competitors are at… We had to position ourselves to stay abreast of the competition and we are doing that.”
Embley predicts the market will not get any worse.
“The bottom of the market has definitely hit and it will be behind us as we move forward.”
As for the sawmill, he said a full and sustained recovery in the North American housing industry is probably what it will take to get it going again.
“Unfortunately this sawmill is a fairly high-cost producer relative to the rest of the industry. It’s a situation where as the market retreated, the high cost producers are the first ones out and the last ones in.”
Then there’s the softwood lumber agreement with the United States. The new allegation is that Canada is violating the agreement by charging unfair stumpage rates for the low-quality, pine beetle-killed wood.
“We’re having to get into a huge legal battle with the U.S. and huge legal costs we can ill-afford,” says Embley.
