Shortage of wood stunting mill growth.

The family that works together should not have much to talk about at Christmas dinner, or so one would think.

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For the Holtz family, however, nothing could be further from the truth.

"Our stepdaughter Karen, when she first married into the family, would tell us 'no talking shop' so when she left the room, that's when we'd all start talking and when she came back, we'd stop," laughs Sue Holtz, coowner of Precut Lumber Inc. "Since then, however, she joins in."

The Holtz family, which includes Sue, husband Carl, son Wyatt, daughter Nancy and the aforementioned Karen, all do different jobs for Precut Lumber Inc. on Sand Dam Road in North Bay. The company produces precut birch strips for pallet construction. Carl and Sue started the company in 1978 with a single portable mill that produced short-length hardwood lumber, and it has since grown to employ 30 people.

"We're still in the building stage. It started off as an experiment and we've been working on that for 10 years now, growing and adding one, two or three employees at a time. We planned to get to a certain stage, and now we're three-quarters of the way there," says Carl Holtz.

Holtz says the company has been making use of an otherwise underutilized species of wood - birch - which is often used as a fibre source for paper makers and as 'hawg' fuel in some cogeneration plants and pulp and paper mills. Its qualities make it well suited for pallet construction.

"It's a nice, high-quality wood and it really hammers well," he says. "It's also not as heavy as an oak or a maple so it's perfect for this kind of use."

Birch however is comparably low in width and also has a tendency to have a bent trunk, which makes it unsuitable for most kinds of lumber milling.

Holtz says he has toured several pallet mills throughout the southern United States and has studied how they handle different kinds of wood.

"The problem is they use bigger diametres of wood and use wood like oak," he says. "They also don't have to deal with things like frost."

After purchasing several pieces of equipment, he has managed to modify it and develop his own process for milling the wood, although he is reticent to share any of the details. What he is willing to divulge is that, when he first got into the business, Holtz could only mill a few per cent of the wood from birch into lumber and the rest would end up as hawg fuel or fibre. Now he can achieve about 50 per cent recovery.

Holtz is continuing to plan for future growth of the mill, but one of the issues that he has to deal with involves getting the wood to supply the mill.

He says although he prefers to cut down on the cost of transportation by getting wood from the Nipissing area, he has had to ship his feed stock from Temagami and Algonquin Park because of wood supply issues. A number of mills, and the growth into other areas, are providing stiff competition for a limited resource.

"It seems four or five years ago there was hardly anyone looking for birch, and now it seems that everyone is looking for it," he says. "I don't know what the reason is. I guess there are a number of reasons. But it has held up some of our plans because we see how hard it is to bring in wood. It's hard to make an investor confident when they see we may be short in the wood supply."

If these issues can be addressed, Holtz plans to build onto the current mill that is fairly close quarters for the 30-people crew.

BY ANDREW WAREING

Northern Ontario Business