Company's fortunes reversed by its new, 'hands-on' managers.
The new owners of a once dormant lumber company in the Sudbury area believe that they can turn the operation around and realize $5 million in revenue in five years.
Ralph LaBrash, co-owner of A & A Forest Products in Nairn Centre, said the company is already experiencing growht because of product diversification and improved, hands-on management.
LaBrash and his three partners are planning to complete a $1.75-million expansion by the end of the year. The expansion includes the construction of a new pole production plant and a new sawmill, as well as the addition of a chipping unit and a mulching unit.
The federal and provincial governments are expected to provide up to 60 per cent of the capital cost, with the remaining funds coming from A & A and its chartered bank.
Included in the company's five-year business plan, the expansion is expected to increase A & A's revenue to $3 million after the first year of production, just three years after the company's purchase.
Pole production is expected to generate half of the company's projected revenues, said LaBrash.
Red pine for A & A's pole operation is obtained from several sources, including 263 hectares of land in Baldwin Township for which A & A holds the Crown management licence.
A & A has an agreement with E.B. Eddy Forest Products Ltd. of Espanola to cut up to 50,000 cubic metres of surplus timber from E.B. Eddy's Forest Management Agreement (FMA) area. LaBrash estimates that the supply will last for five years.
Additional red pine is obtained from suppliers in the Northern United States. A & A also obtains raw materials through salvage work.
During the interview with Northern Ontario Business at A & A's 1,400-square-foot office LaBrash answered a telephone call which netted the firm 40 square kilometres of salvageable red pine. The caller, a colleague from Sioux Lookout, reported that the valuable timber had been blown down by a savage thunderstorm.
"A lot of our supplies are as a result of salvage work," said LaBrash.
Once the red pine is obtained it is gathered in a central yard at the company's Nairn Centre operation and sorted by size and classification. The finished poles range in length from 18 to 70 feet.
The addition of a mulching unit will turn A & A's waste wood into fuel for E.B. Eddy's inplant heating system. It could also be sold to landscaping operations.
Chips to be produced by the new chipping unit will also be sold to E.B. Eddy. However, the materials sold to E.B. Eddy cannot originate from the paper firm's FMA area.
A & A's other products include square-cut timber, hardwood and softwood pulp, processed firewood, posts, hardwood and softwood logs and veneer.
A & A founding partner Philip Martel explains that the recession has forced the company to diversify its product line and explore new opportunities in export markets.
"Customers in Northern Ontario are no longer a reliable or a viable outlet for all our material other than what we produce off present Crown and private licence," Martel said.
A & A was originally established as A & A Logging Company Ltd. in 1987 by Annette Beland and Andre Gignac. In 1989 the firm was purchased as a subsidiary of Nairn Construction Ltd. and held jointly by the co-owners of Nairn Construction Ltd. and Martel.
Martel bought out the other two owners in June of 1990. He presently owns the company along with Charlene Martel, Ralph LaBrash and Kathy LaBrash.
The company employs nine full-time staff and three students in its woodlands, sawmill, shipping, administration and sales operations.
The cruising, timber marking, inventory and forest regeneration work is conducted by a professional forest technologist and a student forester.
PHOTO : A & A Forest Products Ltd. founding partner Philip Martel, left, stands in front of one of the company trucks beside his three partners, Kathy LaBrash, Charlene Martel and Ralph LaBrash. The four partners bring different areas of forestry expertise to the firm.
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Report on Forestry; A & A Forest Products Ltd.; Ralph and Kathy LaBrash, Phillip and Charlene Martel|
|Publication:||Northern Ontario Business|
|Article Type:||company profile|
|Date:||Sep 1, 1991|
|Previous Article:||Capital invested to meet environmental regulations.|
|Next Article:||Feds to invest $100 million in joint management program.|