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Larder Lake mill finds market for metric-sized lumber.

Larder Lake mill finds markets for metric-sized lumber

When the lumber business in Northern Ontario took a downturn, one Larder Lake mill found new international markets.

Lumber from Cheminis Lumber Ltd. is now going to markets in Saudi Arabia, Tunisia and England.

Mill manager Steve Bougie said the foreign opportunities are very important to the mill.

"We wouldn't be running today if we hadn't tapped into these export markets," he said.

The mill, which opened in July 1989, employs 14 workers.

Bougie explained that the move into these markets was made because of the poor Northern Ontario economy.

"The local economy was dead," he commented.

Much of the problem was in the mining sector, he said. The mill supplies mining timbers to operations in Northern Ontario and northwestern Quebec.

Bougie explained that the company was also being hurt by a reduction in local housing starts.

However, the company was not very involved in either the Toronto housing market or the U.S. market. Housing construction has slumped in Toronto, while exporting to the U.S. means paying the 15-per-cent export tax.

The mill's move into international export markets was assisted by its ability to cut lumber in metric lengths.

Bougie noted that many commodity mills are geared to imperial lengths and sizes.

However, the Cheminis mill is set up so that its carriage and head saw operation can accommodate both metric and imperial, he said. "It's adaptable."

The Saudi Arabian deal was arranged by a trading company in Montreal, which contacted the Larder Lake mill. The Montreal firm, Ramori Trading Inc., is owned by businessmen from Saudi Arabia who still have contacts in that country.

"It's a good combination," Bougie said of the Cheminis arrangement with the Montreal firm.

Lumber shipped to Saudi Arabia is in three-to-four-metre lengths. Most of the wood is for house construction.

Bougie is not worried that war in the Persian Gulf will affect the company's export business.

The shipments to Saudi Arabia began last September.

In December the company also received an order from England. The one-by-four-inch lumber is being used for pallet material, for which there appears to be a big demand.

The company also signed an arrangement before Christmas to supply the north African country of Tunisia. Shipments began in late January, increasing the company's exports to more than half of the mill's entire production.

There is also the chance that other export markets may be found. "We've had other enquiries," Bougie said.

However, despite the mill's growing role in exporting, he said it does not want to commit itself solely to that business.

"We want to stay diversified," he said.

In addition to exports, Cheminis also fills orders for custom-cut lumber and it remains involved in the local housing market.

The company has applied for a $66,000 FedNor grant to assist with the installation of a band saw which can improve the accuracy and quality of products.

"Sawing export lumber requires an amount of precision," Bougie explained.

The total cost of the band saw project is estimated at about $150,000, and it would double the mill's production.
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Cheminis Lumber Ltd.
Publication:Northern Ontario Business
Date:Mar 1, 1991
Words:517
Previous Article:Lumber sector still mired in deep slump.
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