Value-added mill plans May startup in northeast, with northwest mill in works.

Arvo Tyrvainen has a simple philosophy, and seeks an answer to a seemingly simple question.

Why should Northern Ontario produce raw lumber and export it when, with a few simple additions, manufacturers can add value--and jobs--to timber before sending it off to another market?

Tyrvainen is president of Superior Thermowood, a company headquartered in Thunder Bay with plans to set up shop in northeastern Ontario.

"Our business philosophy is to work in tandem with existing lumber producers, buying their rough products from them," he says. "We are not going into the sawmill business. We are going into the value-added business. We want to finish the product in Canada and export it instead of exporting raw lumber.

"That is our entire philosophy; create jobs in Ontario."

Traditionally, wood is treated with chromated copper arsenate, which protects wood from dry rot, fungi, moulds, termites and other pests, but has received harsh criticism in the consumer market because of public concerns over arsenic possibly leaching from the wood products over time.

Using a chemical-free process invented in Finland, Superior Thermowood would heat-treat lumber at temperatures higher than that used in traditional kiln processes, making the wood durable and not prone to warping or rotting.

Although the company is planning a northeastern Ontario "hub" in Iroquois Falls, they are simultaneously working on setting up a northwestern hub in Thunder Bay.

Thunder Bay will serve as the corporate headquarters for Superior Thermowood, while Iroquois Falls will serve as the manufacturing centre. There are plans for several other "sub" locations throughout Northern Ontario that will take advantage of nearby sawmills for raw materials.

Tyrvainen says the work right now, with funding supplied by the Ontario Living Legacy Trust (OLLT), consists of testing the product with the help of Lakehead University, including looking at processes involving testing currently available species and underutilized species such as tamarack, birch and poplar. They are also preparing marketing packages to gauge market interest.

"There is a lot that goes into this; the market research we're working on, the marketing of the product, human resources, funding and capitalization. We want to make sure we have all our ducks in a row before we go back to Iroquois Falls for the next presentation (which was planned for late February).

"We continue to move forward towards the goal of getting ready to start production," he says. "Hopefully, we're looking at a May start-up in Iroquois falls, based on everything that is happening."

Iroquois Falls Mayor Ken Graham says the community has a home for Superior Thermowood in the form of a 10,000-square-foot building that used to be the location of Lakeland Peat Moss. All the facility needs is a few renovations.

Capital expenditures at the Iroquois Falls plant will cost $7 million, says Tyrvainen, and they will encompass manufacturing and installing the three heat-treat cooking units, infrastructure for milling and planing, raw materials for inventory, and startup capital.

"Basically, the building is just a shell. It's going to need things like heating and washrooms," says Graham. "We're anxiously hoping for (Superior Thermowood) to come soon."

The reason for the community's anxiety, he says, is the possibility of 80 direct and spin-off jobs that could result within three years, making Superior Thermowood Iroquois Falls' third-largest employer.

Tyrvainen says, when fully realized, Superior Thermowood could conceivably employ more than 200 people throughout Northern Ontario.

"The market reception we've encountered is very positive," says Tyrvainen. "We've had nothing but positive comments from everyone we've talked to, shown the product to and explained the process to. Obviously, our market entry will determine what the market will grow to. What our projections are (in terms of revenue), it's in the millions."

"This is going to be a big industry in Northern Ontario," he says.

www.superiorthermowood.com

www.iroquoisfalls.com

By ANDREW WAREING

Northern Ontario Business