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Grant rebuilding production line, tight-lipped about progress.

Grant rebuilding production line, tight-lipped about progress

Grant Forest Products, the Englehart, Ont. manufacturer of waferboard, is staying tight-lipped about the progress of its efforts to rebuild following the disastrous fire which crippled its showpiece-oriented strand board (OSB) production line on Jan. 17.

The company, which recently underwent a major expansion, tripling its capacity, is the economic mainstay of the town of Englehart and a major player in the economy of Northern Ontario.

Company officials have been refusing comment on the extent of damage done by the fire, the expected date of return to service of the OSB line or any other details relating to the fire.

Pauline Edwards, executive assistant to plant owner Peter Grant, responds to enquiries with a flat, "No comment. We are rebuilding the line, but we have no information to give."

Sources at the plant predict a total of about six months of shutdown and a mid-summer resumption of production on the high-tech facility, as the company struggles to regain its leading role in the waterboard industry. Construction work is currently underway to replace the fire-weakened dryer building, and replacements for specialized equipment rendered inoperable by the fire have apparently been ordered from European suppliers.

Sources at the plant reveal that an internal investigation determined that the fire was caused by a series of events leading to the sudden rupture of a thermal oil line. The thermal-oil-circulating system, heated either by natural gas or by burning wood waste, was being used to warm the "log pond," a hot water bath designed to make the logs entering the plant soft and moist enough to be handled by the chipper, a machine which slices the logs into the wafer used to make board.

Water from the log pond is thought to have infiltrated the oil lines, causing an airlock, which in turn prevented proper circulation of the oil and a drop in temperature at the log pond.

When the heat was turned up in response to the falling temperature, the circulating water in the lines vaporized explosively as soon as it contacted the super-heated oil. This caused the pressurized pipes to burst and led to the release of a cloud of heated oil which ignited into a fireball in the dryer building.

DAMAGE

The January fire, the third at the $85-million plant since September 1989, caused an estimated $5- to $10-million damaged and shut down the new production line which had made Grant the world's largest manufacturer of waferboard.

With a rated capacity of 400 million square feet equivalent per year, in addition to a further 200 million on the old line, the Grant facility accounted for about seven per cent of the continental production capacity for waferboard. Lost production is estimated at up to $4 million per month as long as the fire-damaged line stays out of production.

The line manufactured board in which the wood fibres are aligned (or "oriented") in the same direction. This gives the product greater and more predictable structural strength. In addition, the Grant facility has the capacity to use chips averaging six inches in length, versus four inches for the standard board, which again provides better structural qualities.

Most Canadian production is now of the OSB type, which is recognized as an acceptable substitute for plywood by building codes in both the US and Canada. While prices are variable, OSB currently commands about $5 per square foot equivalent more than the old, "random" fibre type of board.

PRICE SLUMP

Most of Grant's production, marketed through Abitibi-Price Inc., is exported to the United States.

John Lowood, executive director of the Waferboard Institute, points out that the effect of the fire on continental prices for waferboard is extremely hard to gauge.

"Prices are in a bit of a slump at the moment," he says.

While prices are generally up over last year, by about $17 US per 1,000 square feet of 3/8-inch equivalent, Lowood points out that an expected rise in prices which normally happens every spring is not materializing for several reasons. These include high interest rates and a strong Canadian dollar, a slow start to the construction season in the eastern and southern United States where the weather has been cold and wet, and new sources of supply competing for a share of the 8.5-billion-square-feet-equivalent annual market.

Another factor affecting prices and sales is the fact that waferboard is linked to softwood plywood under the Canada/US Free Trade Agreement (FTA). Since softwood plywood is currently the subject of a dispute, the pre-existing tariff of four per cent continues to apply rather than the 2.5-per-cent rate included in the FTA.

PREVIOUS FIRE

A previous fire last November had shut down Grant's original, 11-year-old production line. That facility, manufacturing random-strand waferboard, resumed production on Feb. 1 and is currently running at near full capacity.

The November fire, which started when smouldering chips burst into flames upon exiting a storage vat, caused an estimated $200,000 in damage and $600,000 in lost production. The line accounts for approximately one third of the plant's total, pre-fire capacity.

The first fire, in September 1989, did not seriously affect production. It started under the forming line when a tiny thermal oil leak was apparently ignited by a short-circuiting electric motor.

Grant Forest Products is by far the biggest employer in the Englehart area, with direct employment of nearly 300 people and indirect employment (through logging and trucking contractors) of as many as 500 more. The plant uses under-utilized local poplar, a fast-growing tree with a tremendous capacity for natural regeneration, and it is assured of a sustainable, long-term wood supply with few of the environmental problems faced by the softwood industry in the area.

Of the company's 265 employees on the job before the latest fire, Grant has been able to bring more than 240 back to work, some of them engaged in the repair and rebuilding work currently taking place.

The total number of layoffs never exceeded 40 and workers still on layoff are being recalled as work for them becomes available.

DAVID DEHAAS Correspondent
COPYRIGHT 1990 Laurentian Business Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Grant Forest Products recovers from fire
Author:Dehaas, David
Publication:Northern Ontario Business
Date:Jun 1, 1990
Words:1016
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