Firm maintains foothold in U.S.: identifying niche markets key to exporting success. (Fort Frances/Rainy River: Special Report).

Manitou Forest Products is continuing a trend to diversify its value-added forest products line in order to maintain a foothold in the U.S. markets.

The Rainy River-based company is a producer of fine specialty forest products, such as log-home components, pine exterior siding, wall paneling, pine flooring, oriented strand board pallets and rim boards.

In order to be successful the company has had to listen to the marketplace and develop a mixed bag of products, says Dale Kaemingh, co-owner of the company.

"We try to stay on top of the value added stuff where you can get a bigger return," says Kaemmgh. "We find out what people are looking for. We generally produce to order."

Over the past five years the company has exported on average about 60 percent of its product to the United States annually. However, the stiff 27 per cent U.S.-imposed softwood lumber duty has reduced the company's exports to the United States to 40 percent, says Kaemingh.

As a result, the company has been focusing its efforts on developing new products, such as rim boards for the housing market, Kaemingh says.

In the last five years Manitou Forest Products has invested about $1 million in equipment upgrades and new equipment. The company is now in the process of investing $500,000 in a new high-speed planer/moulder that will allow them to develop new products in the flooring and wood-trim markets.

"We have grown quite a bit, invested a lot of money, trying to keep up with value-added products, to keep us in business" says Kaemingh.

Geoff Gillon, economic development officer for the Rainy River Future Development Corp., says that the key to exporting into the U.S. market is to identify a market niche, just as Maniton Forest Products has.

However, Gillon points out that northwestern Ontario companies tend to underestimate the potential that exists for them in the United States, and more concentration in exporting would be a boon to local business.

Because Fort Frances is a border town, companies in the area are more familiar with the U.S. border cities, Gillon says.

"We have five or six companies that are actively exporting into the United States," Gillon says. "(Border-town companies) are more familiar with the border, we know the customs people, we know the immigration people-this is one of our selling points."

Manitou Forest Products operates year-round and employs 30 full-time workers. About 80 percent of them are from the Rainy River First Nations reserve.

"We are their biggest employer (in the region)," says Kaemingh. "We have a good reliable workforce from the reserve; we try to place key First Nations people throughout our operation."

Manitou Forest Products is a company formed by a negotiated partnership between Rainy River First Nations and Manitou Lumber, owned by Kaeming. Manitou Lumber, has operated a sawmill on the First Nations reserve since 1980.

The new company, formed in 1998, is 51 per cent owned by Rainy River First Nations band and the remaining 49 percent belongs to Kaemingh's company, Manitou Lumber. A board of directors oversees the company, while Kaemingh runs the day-to-day operations.

Under this unique partnership "there is a lot of goodwill and trust," says Kaemingh, and "the councillors from the band have taken a very pro-business approach."