A Report Based on Sawmills in Eastern Canada
G. E. BELL
Ottawa Laboratory, Forestry Branch, Department of Northern Affairs and National Resources, Canada
OVER one million cords of sawmill residue were converted into pulp chips in Canada during 1955. A large proportion of this material was produced on the west coast of British Columbia where the integration of sawmills and pulp-mills is well established, but this method of utilization is also developing rapidly in Eastern Canada. The Forest Products Laboratories of Canada have been very active in aiding the development of this valuable means of utilizing material which is often wasted, and have published numerous reports on the subject.1 This present report2 deals with the economics of barking, chip production, and utilization and discusses the relative importance of the various factors.
1 This report was prepared initially for the consideration of the Co-ordinating Committee on the Utilization of Sawmill Waste for Pulpwood. The Co-ordinating Committee was formed in 1950 by the Forest Products Laboratories of Canada to promote the use of sawmill waste for pulpwood in Eastern Canada and has been active since that time. It is composed of representatives of the sawlog and pulp industries, federal and provincial governments, universities and research organizations. The chairman and secretariat are provided by the Forest Products Laboratories of Canada.2 A contribution from the Ottawa Laboratory, Forest Products Laboratories of Canada, a Division of the Forestry Branch, Department of Northern Affairs and National Resources.
The report is composed of the following main sections: barking costs, chipping costs, transportation and handling costs, allocation of raw materials costs, and general expenses. In so far as the barking process itself is concerned, the report deals with rotor type pneumatic debarkers because there were more of this type of whole-log barkers in operation in Eastern Canada than any other type.
These costs emphasize the general practicability of producing chips at the sawmill. Each situation, of course, must be assessed on its own merits. Sawmill chips are not waste wood but are a manufactured product of the sawmill. The market value of these chips should he roughly comparable to that of forest wood chips and the selling price to the pulp-mills closely connected to the selling price of round wood in any particular area.
Members of the staff of the Ottawa Laboratory visited most of the barking and chipping installations in Eastern Canada and discussed the various factors with a large number of authorities. It is felt that the figures presented herein are accurate and generally representative of conditions in this area, as of the date of the report.
The cost of whole-log barking at the sawmill using a rotor-type barker, based on the information obtained, may be allocated generally as follows: labor costs including compensation and unemployment insurance, power costs, maintenance, bark disposal and depreciation.
Labor costs
In Eastern Canada, the barker is usually Bet up as a unit independent of the sawmill. Logs are taken from the log pond, put through the barker and returned to another pond and thence go to the sawmill. In this way, breakdown or delay at either the sawmill or barker does not interfere with the operation of the other. One case is reported, however, in which the barker forms an integral part of the sawmill. Two men, one operator and one assistant, operate the barker, the log haul-up crew being the same as that normally employed by the sawmill.
The number of men required to operate the barker unit naturally varies to some extent. In one case, seven men were used, three at the log pond feeding the jack ladder, two on the conveyers, one operator and one assistant.
Generally, six men should be sufficient to operate the barker and some installations may be able to operate with as few as four, two feeding the jack ladder, one operator and one assistant. Average wage rates vary in different areas and, of course, the machine operator receives a higher wage than the remainder of the crew. The average rate in Eastern Canada will usually be in the vicinity of 90 cents to $1.15 per man hour and assuming, for purposes of discussion, a six-man operating crew and a $1.05 per hour average wage and a nine-hour day, the total direct labor costs amount to $56.70 per day.
The machine will bark, on the average, between 54 and 60 thousand board feet per day or about 6 MBF3 per hour. Burchill (1) reports a capacity of 57 MBF per nine hours in small spruce logs averaging 32 1/2 board feet per piece, mill tally, and another firm reports 60 MBF per 10 hours in somewhat larger logs. However, on the basis of 57 MBF per nine hours, the direct labor $56.70 costs amount to ($56.70)/(57,000) = 99.5 cents per MBF.
3 MBF thousand board feet
Several indirect labor costs must be added to the above, including unemployment insurance and compensation. Unemployment insurance costs the employer 60 cents per week for each employee earning $56.70 per week. On the basis of six men operating the barker, this amounts to $3.60 per week or about $0.01 per MBF based on 57 MBF per day and a six-day week.
Compensation rates vary from province to province and from year to year but assuming a rate of $4.50 per $100 of payroll, which should be adequate for most conditions, the six men would cost $2.55 per day or $0.045 per MBF.
These are the main labor costs and in this case total $0.995 + $0.01 + $0.045 = $1.05 per MBF of logs barked. Other average wage rates can, of course, be substituted by individual operators to make those figures compare more closely with their own conditions but, on the whole, these figures will give a good indication of what the labor costs can be expected to be.
Power costs
About 80 horsepower is required to operate the barker plus the usual conveyors, the average power draw being of the order of 45 kilowatts per hour. If power costs 0.5 cent per kilowatt-hour, the power costs amount to 3.5 cents per MBF. If the rate is 3 cents per kilowatt-hour, the cost per MBF is about 21 cents. For purposes of this report, power costs are taken as amounting to 15 cents per MBF.
Maintenance
In a well-run operation, maintenance costs appear to average between 20 cents and 30 cents per MBF. If the tools are replaced every four months at a cost of $95 per too], the cost is 8 x $95 = $760 or roughly 13.5 cents per MBF. Oil, grease, repair materials, machine shop work and daily maintenance costs amount to about 10 cents per MBF. In this example, maintenance costs are taken as 25 cents per MBF.
Bark disposal
Bark disposal is an item which cannot be ignored and in some cases forms a considerable portion of the total cost of barking. One firm reports that bark disposal is carried out at their barker operation by one truck at $30 per day or 52.5 cents per MBF. This is apparently a higher cost than can be expected at many operations. Another disposes of bark by spreading and levelling with a bulldozer on a part-time basis. For the purposes of this report, bark disposal costs are. assumed to amount to 52.5 cents per MBF, but at many mills this could well be expected to be less.
Depreciation
When calculating depreciation, a number of methods may be used. The diminishing balance method is employed for income tax purposes but generally the straight line method is used by sawmill firms for calculations of this nature. In this latter method, the total cost is written off in equal yearly amounts.
TABLE 1. - BARKER DEPRECIATION IN RELATION TO ANNUAL VOLUME BARKED
|
Volume barked, in million board feet |
Depreciation, per thousand board feet |
|
5 |
2.37 |
|
6 |
1.98 |
|
7 |
1.70 |
|
8 |
1.48 |
|
9 |
1.32 |
|
10 |
1.19 |
|
15 |
0.79 |
The cost of a conventional 26-inch (66 centimeter) barker is approximately $30,000 and if the cost of a building, installation, etc., is added, the total cost ranges from $45,000 to $55,000. Taking a cost of $50,000 as being generally representative and depreciating over five years, the yearly charges amount to $11,870 (assuming the $50,000 is borrowed at 6 percent and a sinking fund established to retire the debt in five years). The depreciation per MBF varies according to the total volume barked per year.
FIGURE 3. The Andersson pneumatic barker.
For this example, a yearly volume of 7 million board feet is assumed, giving a depreciation cost of $1.70 per MBF.
Total barking costs
The total barking costs per thousand board feet, based on the provisions mentioned, are therefore, as follows:
TABLE 2. - TOTAL BARKING COSTS
|
Item |
Cost, per thousand board feet |
|
Labor |
1.05 |
|
Power |
0.15 |
|
Maintenance |
0.25 |
|
Bark disposal |
0.525 |
|
Depreciation |
1.70 |
|
TOTAL |
3.675 or say 3.68 |
Moving costs
Although the barker is usually set up as a stationary installation, one firm has employed the barker as a portable unit, moving it about three times per year. They report that a move can be accomplished by the normal operating crew in a period of about one week, at a cost of approximately $300.
Volume of chips
The volume of chips per MBF of lumber sawn depends on the size of logs, type of sawmill and the utilization standards of the mill. When buzz barkers are used on the slabs and edgings, the recovery generally ranges between 0.4 and 0.7 cords of slabs and edgings per MBF, sawn. Usually, however, not all of the slabs and edgings are barked on the buzz barkers, the smaller ones being discarded. With whole-log barkers, slabs and edgings recovery amounts' to at least 0.7 cords per MBF under normal conditions in Eastern Canada and may exceed 0.85 cords per MBF. A figure of 0.8 cords per MBF is used in this case and in most instances will probably be representative.
The cord is a somewhat indefinite unit of measurement because of the variation in solid wood volume and most companies are using the bone-dry ton as a unit of measurement. Studies by this laboratory (2) have shown that a cord of barked spruce and balsam fir slabs and edgings will average about 77 cubic feet solid wood per stacked cord, under Eastern Canadian conditions, and for -purposes of standardization in this report the following are considered as equivalents:
|
1 stacked cord (barked) of slabs and edgings |
= 77 cubic feet of solid wood |
|
|
= 1,875 lb. bone dry |
|
Recovery per MBF4 |
= 0.8 cords = 62 cubic feet of solid wood |
|
|
= 1,500 lb. bone dry |
|
|
= 0.75 bone dry ton (bdt) |
4 Recovery per thousand board feet may be calculated as follows: studies (3) by this laboratory have shown that it requires between 176 and 200 cubic feet of solid wood in log form to produce 1 thousand board feet of sawn lumber. Assuming an average of, say, 185 cubic feet per MBF and a yield of slabs, edgings, and trim of 34 percent, the yield is 63 solid cubic feet per MBF of chippable material. Some of the short trim ends will not be chippable so the actual yield is probably closer to 62 solid cubic feet per MBF.
Total barking costs of slabs
Since total barking costs per cord (and per bdt) and edgings have been calculated, in this case, to amount to $3.68 per MBF, the cost per cord., based on 0.8 cords per MBF is $3.68 X (1.00/0.8) = $4.60.
The cost of barking per bdt is $3.68 x (2000/1500) = $4.91.
Chipping costs vary to some extent but are much smaller than barking costs. A satisfactory chipper for slabs and edgings, with power, conveyors, and screens, installed, costs about $20,000. Two men are usually stationed on the conveyor to the chipper to regulate the feed and to ensure that all bark has been removed from the wood being chipped. Cost of chipping is roughly as follows.
Labor
Two men at $1.05 per hour, nine hours per day, cost $18.90. If 43 bdt of slabs and edgings are produced (0.75 of 57 MBF) the direct labor cost amounts to $0.44 per bdt. Adding compensation costs at 2 cents per bdt and unemployment insurance at 0.5 cent per bdt, the total labor costs amount to 46.5 cents per bdt. (A comparable figure is 44 cents per cord.)
Power
About 80 horsepower is needed to operate the chipper and conveyors (or fans) to the railway car or hopper. If the same figures on power consumption are used as was the case with the power costs of barking, the power costs amount to 4.5 cents per kilowatt-hour. Figures for this example are taken at 20 cents per bdt. (A comparable figure is 19 cents per cord.)
Maintenance
The chief maintenance costs are the sharpening and periodic replacement of the chipper knives. Total maintenance costs amount to approximately 5 cents per bdt.
Depreciation
Yearly depreciation of a $20,000 chipping installation amounts to $4,750 based on a five-year period (assuming the $20,000 is borrowed at 6 percent and a sinking fund is set up to retire the debt in five years). The cost per bdt and per cord is given below for various volumes.
TABLE 3. - DEPRECIATION COSTS ON CHIPPER INSTALLATION
|
Volume barked per year, in million board feet |
Bone-dry ton per year (based on 3/4 bdt per thousand board feet) |
Cords per year (based on 0.8 cords per thousand board feet) |
Depreciation |
|
|
per! bone dry ton |
per on cord |
|||
|
5 |
3 750 |
4 000 |
1.27 |
1.19 |
|
6 |
4 500 |
4 800 |
1.06 |
0.99 |
|
7 |
6 250 |
5 600 |
0.90 |
0.85 |
|
8 |
6 000 |
6 400 |
0.79 |
0.74 |
|
9 |
6 750 |
7 200 |
0.70 |
0.66 |
|
10 |
7 500 |
8 000 |
0.63 |
0.59 |
|
15 |
11 250 |
12 000 |
0.42 |
0.40 |
In this example, with 7 million board feet being barked, the depreciation costs on the chipper installation amount to $0.90 per bdt or $0.85 per cord.
Total chipping costs
The total chipping costs based on these provisions are, therefore, as follows:
TABLE 4. - TOTAL CHIPPING COSTS
|
Item |
Per bone-dry ton |
Per cord |
|
Labor |
0.466 |
0.44 |
|
Power |
0.20 |
0.19 |
|
Maintenance |
0.05 |
0.05 |
|
Depreciation |
0.90 |
0.85 |
|
TOTAL |
1.615 |
1.53 |
The total cost of whole-log barking and the chipping of the resulting slabs and edgings is, therefore, $4.91 + $1.615 = $6.525 per bdt or $4.60 + $1.53 = $6.13 per cord.
It is very difficult to generalize on handling and transportation costs because of the variety of methods in which these operations are carried out. For short hauls, trucks are usually employed for the transport of chips. Chips are conveyed from the chipper to a hopper and thence loaded into trucks. On short hauls of up to 10 miles (16 kilometers), a suitable truck costing about $30.00 per day (with driver) could be expected to handle between 10 to 15 cords (or bdt) at a cost of between $2.00 and $3.00 per cord. This would bring the total cost, delivered at the pulp-mill, to between $8.13 and $9.50 per bdt or per cord.
For longer hauls, it is general practice in Eastern Canada to use railway box cars. Costs per cord for conveying, either by bar type conveyor or pneumatic, to the box car, moving cars at the mill, etc., are roughly as follows:
Freight rates vary, of course, in different parts of the country and with the length of haul. Assuming a rate of 10 cents per hundred for a hundred mile haul, the freight costs amount roughly to $3.00 per cord (green cord assumed to weigh 1.5 tons).5
5 A green cord of spruce can be expected to weigh about 1.5 tons. Green moisture content of spruce averages from 55 to 75 percent, which at a S. G. of 0.37, 77 solid cubic feet per cord and an average of 70 percent = 1.5 tons.
TABLE 5. - CONVEYING COSTS PER CORD
|
|
$ |
|
Power (bar conveyor or air equipment plus car moving device) |
0.04 |
|
Maintenance |
0.02 |
|
Depreciation |
0.07 |
|
Labor including placing in car doors, etc. |
0.27 |
|
Car door expenses |
0.17 |
|
Demurrage |
0.01 |
|
TOTAL |
0.58 |
Total cost of loading and freight in this case is $3.00 + 0.58 = $3.58 per cord, and the cost delivered to the pulp-mill, therefore, varies between 39.70 and $10.10 per cord (or bdt).
It should be emphasized that this section is composed of examples only and is shown here merely to give some indication of the order of the costs of this phase of chip production.
The fact is sometimes overlooked that when a sawmill commences chip production, a portion of the cost of the raw material (logs) should logically he borne by the chips. (This, of course, is the general practice in Scandinavia where this type of operation has been in existence for some time). In a single product operation, such as a sawmill producing lumber as its main product, the entire cost of raw materials is borne by the one main product, and usually no portion of the raw materials cost is assigned to any by-product produced. However, in the case of a joint product operation, such as a sawmill producing lumber as the main product and chips as the joint product, it is usual to assign a portion of the cost of the raw materials to the joint product. This may be done on an equal basis but often the joint product bears only a percentage of the cost borne by the main product.
For example, 185 cubic feet of logs (solid wood) delivered to the sawmill will produce 1 MBF of lumber (92 cubic feet),6 0.8 cord of chippable material and about 31 cubic feet of sawdust. If the logs are spruce and cost $42 per MBF at the mill and if the sawdust is discarded or burned and no materials costs assigned to it, the allocation of raw materials cost to lumber and to chips might be as follows:
6 One thousand board feet of lumber is equivalent, nominally, to 83.3 cubic feet but usually the lumber is full sawn and studies by the Ottawa Laboratory have shown that, in Eastern Canada, the actual volume is about 92 cubic feet.
Cost of logs to produce 1 MBF of lumber and 0.8 cord of chips = $42.Therefore, cost of 92 cubic feet of lumber and 62 cubic feet of solid wood = $42.
Suppose the raw material cost for the chips is set at one third that of the lumber per cubic feet of solid wood. (This is a quite usual proportion in operations of this nature, but, of course, can be greater or less depending on the policy of the management.)
The cost of raw materials can then be calculated to amount to $34.30 per MBF for the lumber and $7.70 per 0.8 cord of chips. Cost of raw materials is, therefore, 1.25 of $7.70 = $9.60 per cord of chippable material.
On this basis, the value of the chips, delivered to the pulp-mill would be of the order of $20.00 per cord or per bdt.
It should be mentioned again that this is an example only and has been included to emphasize the fact that once a sawmill enters into the chip production field, it becomes a joint product operation and the chips should bear some of the cost of the raw materials. The proportion of this cost is for the decision of management, but, in any event, the selling price of sawmill chips should be closely connected to that of forest wood chips in any particular area.7
7 Acknowledgement is made to the following for advice and assistance in obtaining the information on which this report is based:J. G. Burchill, Geo. Burchill and Sons Ltd., South Nelson, New Brunswick; P. Morley, Canadian International. Paper Co., Gatineau, Quebec; R. L. Seaborne, Mersey Paper Co. Ltd., Liverpool, Nova Scotia; A. Murray, Price Bros. and Co. Ltd., Rimouski, Quebec; A. W. Goodfellow, Fraser Companies Ltd., Plaster Rock, New Brunswick; C. R. Silversides, Abitibi Power and Paper Co. Ltd., Toronto, Ontario; A. Jessop, Forano Ltd., Plessisville, Quebec.
FIGURE 4. A chipper used in a sawmill in Eastern Canada to convert slabs and edgings into chips.
(1) BURCHILL, J. G., The Andersson barker, Timber of Canada. December, 1955.
(2) BELL, G. E. and E. BROOKS, Cord-cubic volume relationship of slabwood and edgings. Timber of Canada. November, 1954.
(3) BELL, G. E., Factors Influencing the Manufacture of Sawlogs into Lumber in Eastern Canada. Bulletin 99, Forest Products Laboratories of Canada. Ottawa, 1951.
|
1 inch |
= 2.540 centimeters |
|
1 foot |
= 0.3048 meter (1,000 feet: 304.8 meters) |
|
1 cubic foot |
= 0.02832 cubic meter |
|
1 mile |
= 1.609 kilometers |
|
1 pound |
= 0.4536 kilogram |
|
Roundwood (general) |
1 cubic foot = 0.0283 cubic meter |
|
Sawlogs |
1,000 board feet = 4.53 cubic meters |
|
Sawnwood |
1,000 board feet = 2.36 cubic meters |
|
1 stacked cord (barked) of slabs and edgings. |
|
|
|
= 77 cubic feet of solid wood |
|
|
= 2.1806 cubic meters |
|
|
= 1,875 pounds |
|
|
= 890.42 kilograms |
