STRATEGIC PLANNING

CASE STUDIES

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Strategic Planning—The Beck Group assisted a large user of industrial lumber products in strategic planning focused on the growth of their business. Beck’s tasks included assessing historical trends and forecasts in timber availability for key species used by the company, identifying possible alternative/substitute species that could be used, assessing the survivability of key lumber producers, identifying trends and factors in the dynamics of lumber imports and exports from the U.S., and evaluating the survivability of remanufacturing operations that convert industrial lumber into millwork parts.

 

Beck helped this client effectively and efficiently assess opportunities for gaining greater control of their raw material supply chain. Key to the analysis was Beck’s knowledge and experience of timber supply, as well as our knowledge and experience regarding the long-term viability of key sectors of the forest products industry infrastructure. 

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Fence Mill Feasibility—The Beck Group assisted a lumber manufacturer interested in developing a greenfield sawmill designed to produce wood fence pickets in the U.S. West. Beck’s scope of work included evaluating the local timber supply and demand balance for the target species, analysis of the market for fence pickets, modeling likely financial and operational performance (including sawing patterns, process flow, product mix, staffing, and manufacturing economics), evaluating potential sites for suitability, collaboration with sawmill design engineers on equipment specifications and process flow, and evaluating impacts on the company’s other operations. 

 

Our knowledge and experience in timber supply and demand, specialty forest products manufacturing, and forest products markets helped our client develop a solid plan for constructing a new sawmill to produce specialty lumber products.

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Capital Project Planning and Feasibility Analysis—The Beck Group assisted this confidential South American lumber manufacturer in analyzing several potential projects for expanding its operations as part of an overall plan for the sale and recapitalization of the business. The client, who was in negotiation with a potential purchaser, retained Beck to independently assess the feasibility of several capital projects that were focused on increasing the plant’s production capacity. They included additional lumber dryers; added sawmill edger capacity; installation of a planer mill; and the addition of a small remanufacturing operation. Beck reviewed capital cost estimates and vendor quotations, completed a financial analysis for each project, and projected the mill’s improved performance. The client used the finished report to sell the business.

 

BECK staff members have extensive industry experience in capital planning projects and feasibility analysis of wood products businesses and are frequently asked to assist clients in this important area.  Whether a small foreign lumber producer or a larger North American lumber forest products manufacturer, The Beck Group can assist. We work closely with various engineering firms and equipment vendors and have a track record of arriving at practical capital improvement plans that achieve their intended results.

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San Carlos Apache Sawmill Planning—After decades of planning with the assistance of The Beck Group, the San Carlos Apache Tribe now has an operating sawmill in eastern Arizona. The Beck Group helped the Tribe plan and develop a sawmill that is scaled to match the amount of timber available from the Tribe’s forest resources on reservation timberlands; that can handle a large range in log sizes; and that can produce lumber to a broad range of thicknesses, widths, and lengths. The planning assistance included timber supply, market, and product line analyses; assessment of a range of sawmill equipment alternatives; feasibility assessment and business plan development; assistance with project financing; and work with an engineering and installation contractor on equipment procurement, installation, and start-up planning.

 

Beck consultants’ extensive hands-on experience in the sawmilling world enables us to see a facility not merely as an investor might, but also as an owner would. The client gained the means of utilizing its lands to help improve Tribal members’ economic outcomes in sustainable fashion.

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Planning Assistance for New Sawmill Construction—The Beck Group assisted a confidential client – a vertically integrated sawmill and lumber pallet manufacturer – in planning the addition of a new sawmill operation as the company transitioned from predominantly hardwood pallets to mostly softwood pallet production. The assistance included an in-depth timber supply assessment of regional hardwood and softwood timber availability; assistance in site selection, sawmill equipment configuration and capital cost planning; and feasibility analysis of multiple alternatives, including the possible purchase, relocation, and upgrading of an existing sawmill operation. While designed primarily for Southern Yellow Pine pallet lumber, the final mill configuration was also capable of specialty hardwood lumber production.

 

For this project, Beck staff worked closely with mill management in developing and analyzing various alternatives before arriving at a mill configuration that achieved the overall specialty product line specifics the company was planning. The project team had worked together on prior projects and their working relationship, along with the input of partner vendors, helped achieve a cost-effective solution that met the company’s return on investment objectives. Company management approved the plans and the new mill has been constructed.

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Planning Assistance for a New Sawmill, Remanufacturing Plant and Biomass Power Generation—Beck staff assisted a confidential client in developing plans for a new greenfield sawmill, remanufacturing plant, and associated biomass power plant to complement the company’s South American timber holdings. The focus of the project was manufacturing high-grade pine products to supply global markets with a combination of lumber and remanufactured products. Because of limited markets for sawmill residuals in the region, a biomass power plant was included in the plans to provide an internal market for the residuals as well as power for the operations. Some excess power was also examined for sale into the regional power grid.

 

Beck staff also evaluated the acquisition and expansion of an existing sawmilling company as an alternative to new greenfield construction. Beck staff members worked closely with the client in assessing timber supply; assessing alternative mill locations; analyzing market opportunities for both lumber and remanufactured products; developing capital plans and cost estimates for the entire operation (with the assistance of an engineering firm subcontracted by Beck); and in detailed process flow and financial modeling/feasibility analysis.

 

With nearly 50 years of history, The Beck Group has extensive experience in assisting clients with complex planning projects, whether in North America or offshore. Having actual sawmill performance information based on past benchmarking studies and prior planning projects, plus extensive experience working with a variety of types of sawmills (hardwood; softwood; commodity-focused and specialty-oriented mills; large-scale and medium- to smaller-scale operations), provides our clients with information and analysis at a high level. Additionally, our use of subcontractors with specific areas of expertise (such as biomass power generation, specialty millwork markets, and sawmill engineering) allows us to assemble project teams to address even the most complex forest products planning projects.

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Acquisition Due Diligence of a Specialty West Coast Lumber Producer—This project was undertaken at the request of a confidential client to assist in the evaluation of a specialty lumber producer with multiple West Coast manufacturing locations. A first step in the acquisition due diligence was an in-depth supply and demand evaluation of the timber resources and competition in the region surrounding the mill operations. This was followed by an evaluation of the overall business including an assessment of the sawmill operations, management reporting systems, management team and workforce, and facility maintenance/capital expenditure plans and opportunities. The due diligence also included a critical review of the company’s financial projections and an assessment of the company’s competitive position for log procurement, including development of return to log values for the company’s specialty product line in comparison to mills competing for the same timber resource producing other lumber products. Additionally, Beck staff provided comparable transaction values from a database of prior sawmill transactions maintained by The Beck Group.

 

The acquisition was completed, and the company continues to grow and improve its new business.  Beck staff members were able to utilize their extensive experience in the specialty lumber business including knowledge of markets, manufacturing economics of a variety of different product lines, and regional timber supply and demand. Additionally, The Beck Group maintains a database of historic sawmill transaction values that is useful in establishing the fair market value of a sawmill business.​​