sag i wg rn re PE eR nn : ——— a This week: ilton Jovial has copies M of the two bid proposals from his Terrace forester Herby Squish (These people aren’t real... remember?). For signing over a little more than half a million dollars worth of securities to the province of B.C., he has a shot at timber cutting rights on 100,000 hectares of northwestern forest. The sales will be advertised, of course. And there will be competi- tion. But Milton has faith in Herby asd doesn’t believe the competition will come up with a better offer. The only thing Milton needs now is a sawmill to go along with his Forest Licences, and he’s in busi- ness. ; First, however, he has some serious thinking to do. A few weeks ago Milton’s marketing people told him he had to go into value-added production in a big Milton conceives. : : anew sawmill _ way if he was going to make any - money. The cost of this, though, was an additional $20 million in mill construction costs, and Milton said no way. But this advice from the market- ing people was followed by bad news. from Herby. His latest calcu- lations showed that only about 330,000 cubic meters of Milton’s expected Annual Allowable Cut of 600,000 cubic meters were saw . logs; the balance would have to be turned into pulp chips. What this meant in financial terms was that Milton would make around $3.63 million a year on lumber and lose about $3.17 mil- lion on chips; his net profit at the end of the year would be less than half a million dollars. You might remember the reason for this. According to Herby, it would cost $46.75 per cubic meter to produce chips that were only worth $35 per cubic meter. After a few cups of Maalox, Milton went to his marketing and mill design people and said sim- ply: "Do something. Quick." The result was predictable. The marketing people came back; "We already told you... Value added. It’s the only way to go." A few more cups of Maalox. "But that'll cost me another $20 million." "Not necessarily," said his mill designers. "We've got a plan." The concept was simple. “"Maxi- mize clears and follow the head rig Contributed by Gordon Robinson _ The name “‘Kemano’’ comes from the Indian word “Chee- mani’’, which means horseclam. - ‘At one time the Indians who lived at Kemano Village faced starvation. Fishing the summer before had been very poor and fall hunting had been just -as bad, and now in February there was just no food. To save themselves from star- vation, the people decided to temporarly abandon the village and to move to the Fish Tray Bay area where sea food was always available. When all the canoes were loaded, it was found that there was no room Pifer — Continued from page AG In fact, he was out of the province. It seems not even some of his | Cabinet ministers were aware that he was in Toronto on ‘‘private business’? on Thurs- _ day and Friday. And his staff, who had pre- tended for 10 days not to know about the trip, moaned about how hard it was to keep tabs on him. Speculation was rampant. Was he continuing to conduct Fantasy Gardens business — such as lining up financing, perhaps? — or visiting his pal and bagman Peter Toigo? - Whatever he was up to this time, it was obvious that many of the mice had decided it was time to play before the Cat got back! for one old man. His grandson, who was about 10 years old, re- fused to leave him and so the two were left behind in the aban- doned village. Some time after the rest of the people had left, the old man told the boy to go to the foot of a small rock slide nearby to look for fiddle fern roots. These roots often grow near rock slides and are edible. It was the old man’s hope that the boy would find enough roots to enable them to survive. When he got the slide the boy saw a strange phenomenon...a tiny stream of water erupted out of a small hole in the ground. The boy ran back and excitedly announced his discovery. The old man accompanied him back to the slide, when they found the tiny hole he dug down into the earth and extracted a cheemani or horseclam. It is well known that there are no clams anywhere in Gardner Canal, where Ke- mano is located, and no clams are ever found -above the high tide mark. Believing that the Cheemani was a good luck charm, the old man carefully put it into a pouch which he carried. When they re- turned to their home he hid it in a safe place. - From that day on things im- proved for the two. When walk- ing on the beach they found dead fish or seals washed ashore by the tide. They found deer, mountain goat, porcupine, or other game when they walked in the forest. All this food they smoked and preserved. . When the rest of the people returned the following spring, they found that old man and boy | Down by the River m@ watching the issues flow by 4 Commentary and analysis by Terrace Review staff and guest writers had fared far better than they had. All because, they believed, of the good luck brought by the cheemani. The little rock slide was ever afterward-known as Cheemani Nook, The Place of the Chee- mani. In time this name was us- ed for the whole valley, but it was changed to the present spell- ing of Kemano by government map makers who did not know ‘the story of the Cheemani and who could not pronounce the lo- _cal Indian names for places in British Columbia. The map makers were, how- ever, familiar with the name ‘*‘Captain Caamano”’. This was the name of the captain of a Spanish exploration ship which had explored the B.C. coast dur- ing the time when Spain claimed the west coast of Vancouver Is- land, and also had a fort and set- tlement called ‘‘Nootka’’ at Friendly Cove on Vancouver Is- land. Caamano Sound, a body of water separating Campania Is- land from Aristazabal Island (commonly known as Aristabal Island by local fisherman) on the outer B.C. coast, is named after Captain Caamano. The name Caamano Sound appears on ail hydrographic maps of the north- ern B.C. coast. When the map makers heard the Indian name ‘‘Cheemani”’, they could not pronounce or spell it in English. They thus decided to use the Spanish cap- tain’s name of Caamano be- cause the sound of the name was similar to Cheemani. However, they did. not spell the Spanish name correctly and used the pre- sent English form of Kemano. _by Tod Strachan, in consultation with Rod Arnold and Doug Davies | _with a chop saw trim system and finger jointer," Milton was told. "It will only cost you another two million." "What in the world are you talk- ing about?" The design people explained. Milton’s sawmill would get the best value out of small logs on a canter line while the larger logs would go through a head rig. "Maximize clears" meant the logs would be cut parallel to the outer edge of the log rather than the centre. The log is rotated 45 degrees with every cut or two which means once the log is sawn all that remains is the tapered core of the tree, which is better used for chips than lumber anyway. Also, by cutting parallel to the outer edge of the log rather than the centre, knots are cut perpen- dicular rather than at an angle and are therefore smaller. The end result? More grade 1 and 2 lumber out of: the same tree. In other. words, better utilization. The chop saw trim system would allow short lengths, as short as eight inches Milton was told, to be cut from lumber to short for the . commodity market. And the finger jointer would do just what the name applies; cut interlocking slots and tabs on one end of each of these short pieces of wood piece. These varying lengths of 2x4 or 2x6 could then be glued together end-to-end to make a single eight foot or longer piece of lumber. The end result, the designers told him, was a piece of wood which, for many uses, is structurally superior to a single piece of lumber. And worth a lot more money too. Interesting, but Milton's not really convinced. "Wait a minute," he paused. "What was that about money?" It’s simple, was the reply. They explained that commodity lumber today sells for the same price it did more than 15 years ago; $73.50 per cubic meter. And in the last 15 years production costs have risen dramatically; inflation has knocked the socks off the dollar. This means that there is less profit in a 2x4 today than there was 15 years ago. So if you’re going to produce commodity lum- ber you had better get as much as you can out of cach log, and at the same time make sure every cut is grade 2 or better. And then you had better take the waste and turn into something more valuable than chips. - The numbers look like this. Given ithe timber available to Milton, cheaper equipment of an older design would mean a utiliza- ‘tion rate of.only 46 percent. Out of his AAC of 600,000 cubic meters, 55 percent were saw logs, accord- ing to Herby. This means Milton would have 350,000 cubic meters, and at a utilization rate of 46 per- cent would get only 161,000 cubic meters of lumber. The value of this lumber, at $72.50 per cubic meter, would be $11.7 million. You may recall, however, that when Herby deducted logging and milling costs and took away the $5 per cubic meter he estimated Milton would lose on chips, Milton ended up with a net annual profit of only $457,000. That was far from acceptable. With this new scenario, though, Milton would get more than 55 percent saw logs out of his licence due. He could, in fact, use 66 percent of his timber for saw logs. And due to increased milling effi- ciency, he could raise the utiliza- tion rate of those saw logs to 62 percent. . Now Milton’s financial projec- tions looked -tike this. With 400,000 cubic meters of saw logs going through a mill that was 62 percent efficient he ended up with 248,000 cubic meters of lumber, This was divided between 92 per- cent commodity lumber and 8 percent value added, And although the commodity products were still only worth $72.50 per cubic meters, the value added product was worth a whopping $260 per cubic meter. This would obviously make a big difference in that bottom line figure of $457,000. But the mill design people had even more good news. There would be fewer chips. Instead of losing $1.25 million annually on pulp chip sales, Milton would only lose $1 million. And for the bottom line, Milton could multiply that original estimate by a factor of almost ten. Milton passed this news on to Herby, along with the securities required to accompany the bid proposals, and it wasn’t to many weeks before the phone rang. It was Herby. "Good news," he said. "You’ve got your Forest Licences. There were two other bids but they didn’t even come close. They weren’ far off on their bonus bid, but there was no way they could compete with this mill design of yours in terms of utilization of new jobs created..." Milton hung up before Herby finish. Excitedly, he phoned his mill design people. "You can start those drawings," he said. “We're going to build.a sawmill." . ...