A new value-added mill in the Hearst area will begin producing furniture components for a major international furniture maker starting this fall.
Industries LacWood Inc., a startup company, will move into a new facility to be used to manufacture bed frames and shelving components for IKEA.
FedNor and the Northern Ontario Heritage Fund Corporation have contributed a combined $1.5 million in repayable loans towards the construction of a 15,000-square-foot building in nearby Hallebourg, about eight kilometres east of Hearst on Highway 11.
Minister of Natural Resources David Ramsay confirmed the connection in an interview with Northern Ontario Business. Read his comments in a related story >>
The plant will use softwood feed stock from lower grade wood and shorter lengths of spruce lumber from area saw mills located within a 250-km radius of Hearst.
With a September start-up planned, president Normand Lacroix says the company will produce about three-million-board-feet by year’s end, with production expected to ramp to 10 million-board-feet in 2006.
He was reluctant to disclose the project’s total cost, which includes financial support from Caisse populaire, the Nord-Aski Regional Economic Development Corp. and some private investors.
In late June, the company was operating out of temporary facilities in Hearst with only six employees, but was expected to increase to 15 by September, with the potential to double the workforce if the demand increases.
A low-energy drying facility is also planned.
Together with business partner Jocelyn Blais, Lacroix had been eyeing possible value-added opportunities for years.
“All the wood from our area is shipped out of town to be transformed one way or the other.”
In the planning stages for more than a year, the project emerged out of contacts made by development officials at Nord-Aski with IKEA and through discussions with major lumber manufacturers in the area.
Nord-Aski manager Adrien Veilleux expects to be making announcements about other similar ventures soon.
“Everybody’s going into value-added, and we’re fighting tooth and nail for jobs. We think we’ve got a recipe that works,” says Veilleux, who adds
he has “five more deals” in the works. He says he intends to create a value-added wood product manufacturing cluster in Hearst.
Lacroix, a respected Hearst businessman, has been involved in the logging industry for most of his life, aside from a brief stint in the mid-1980s as a grain broker in Timiskaming.
Starting with the purchase of a Hornepayne contracting company, he has been in the logging business for the past 17 years.
He returned recently from a Team Northern Ontario trade mission to Scandinavia to observe how the forest industry is able to spin off secondary manufacturing.
“There are probably three more (forms of) employment that can be produced out of secondary industry, than from primary.”
Though value-added manufacturing has been a widely discussed concept in the North for years, Lacroix says in the past there was never enough government support to promote it, or enough entrepreneurs ready to take the plunge.
Greater co-operation from the primary forest producers is necessary, says Lacroix, with wood supply being sourced locally, not trucked in from a distance.
In Finland and Sweden, there is greater integration and a more cohesive relationship between primary and secondary industries, he says.
