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LTM Chips: Quality Chips at Steady Pace

Acrowood principal supplier for chipper, screens, other equipment for Arkansas chip mill

By Carolee Anita Boyles
Date Posted: 4/1/2005

MT. HOLLY, Arkansas — In business, as in life, sometimes one thing just leads to another. And that’s what happened for the Watson family as one forest products company led to another, and then to another.

      The company began as Watson Sawmill in 1983. “My dad started in the logging business years and years ago,” said Donald Watson, who is part owner of the sawmill. “He bought timber and had a logging operation. Then in 1983, when I graduated from college with a degree in general business, I was going to take a job with Wal-Mart. But my dad talked me into coming back to the town where I was raised. My dad, my brother and I bought the sawmill in a three-way partnership.”

      Donald started running the sawmill. It was a homecoming to more than just Mt. Holly; it was also a return to his roots.

      “I was raised in the log woods,” he said, “and so was my older brother, Pete. So we came back in and started the sawmill. My dad and Pete did both procurement and logging until we lost my dad earlier this year, and I still run the sawmill.”

      Before long, Watson Sawmill started drying lumber, and Watson Lumber Company was born, which is separate from the sawmill. “We bought a lot of wood and had a lot of timber procurement,” Donald said, who is now 44. “We could see the need to put in a small chip mill to make pulp-type chips for paper mills.”

      That was in 1990. The Watsons named the new business LTM Chips Inc. “We started off with a contract to do 100 loads a week,” Donald said. The new company grew quickly, and the Watsons soon found that the chipper they had was not capable of handling the volume of wood they were putting through it.

      “We needed a pulp duty-type chipper,” Donald said. “We looked at several brands, and Acrowood looked the best for us. So we put a 98-inch Acrowood in during 1996.” The chips that LTM Chips produce are supplied to three paper mills that are within 115 miles.

      LTM Chips processes both hardwood and pine pulpwood into chips; about half the chip volume is hardwood and the other half is pine.

      All three companies that are a part of the Watsons’ enterprise still are at the same location. “We’re all on the same yard, which is 172 acres,” Donald said. The entire enterprise is run by a total of 79 employees. Most of them work for Watson Sawmill and Watson Lumber, and some employees move back and forth among the three companies. For example, the maintenance staff services machinery and equipment for all the companies.

      Because they have been so successful with their forest products industry enterprises, the Watsons are able to provide benefits for their employees that many sawmills and companies do not. For instance, they offer a matching 401k retirement program for employees.

      “We offer health insurance, and we also provide safety training,” Donald said. “We have a safety manager in-house and hold monthly meetings about different safety issues for all the programs that our insurance company sets forth for us. And our safety record at the chip mill is better than that of most of the businesses in this part of the country, particularly in the wood business. We’ve gone many years with no accidents.”

      With 10 employees and the Acrowood chipper, LTM Chips is able to produce far more chips than it did when the company first began. “Since we put the Acrowood in, our production has doubled,” Donald said. Other equipment also has been replaced for increased efficiency.

      “When we started, we had a big bottleneck with screens that were too small and weren’t high-volume screens,” Donald said. “We now have two 12x18 Acrowood screens that really let us produce.”

      LTM Chips gets pulpwood from three different sources. The Watsons buy tracts of pulpwood timber and they also sort out pulpwood from logs going to the sawmill. They also buy additional pulp logs from other sawmills.

      “We take logs from the sawmill that won’t make lumber and we chip them,” Donald said. “We also buy some from local sawmills that have rot or some defect so that they can’t saw them. We’re about sixty percent procurement driven, we have about thirty percent gate wood, and we get about ten percent of our chipping needs from the waste from our sawmill.”

      Logs arriving by truck at the chip mill are weighed. The trucks pull onto twin scales, first on their way into the mill and again after they have unloaded.

      Each inbound truck takes its load of logs to a PSI crane. “It unloads the truck in two bites,” Donald said. “It can either set the wood in a radius around itself for storage, or it can set the wood on a deck that provides positive feed to the drum.”

      Logs on the deck are fed to a drum debarker. The bark that is removed from the logs passes through slots in the drum and falls onto vibrating conveyors under the drum. The bark is conveyed to an Acrowood disk scalper to remove dirt and debris.

      Donald and his brother have been very pleased with the performance of the Acrowood disk scalper in this phase of the operation. “That system removes limbs, vines and trash out of the wood,” Donald said.

      After the bark leaves the disk scalper, it enters a Jeffrey hammer hog that grinds it into mulch. The mulch is sold to one of several mills for boiler fuel.

      “We did three key things with Acrowood that really have changed our business,” Donald said. “We put the disk scalper in at the same time we put the chipper in, and it’s made a big difference in the hammer mulcher. There are carbide hammers in it that we were changing every four to six weeks. Now that we have the disk scalper, we’re changing them every six months. The only person who doesn’t like it is the guy who rebuilds the hammers. He wants us to take the disk scalper out because he’s lost a lot of money as a result of us having it! It has only cost us a half a day since we’ve had it in. It’s one of the best pieces of equipment we’ve ever bought.”

      After logs exit the drum debarker, they go to a duel infeed chain that leads to the Acrowood 10-knife, 98-inch chipper. “The logs go through the chipper, and the chips go out a big conveyor that’s underneath,” Donald said. “The chips are then separated in the twin Acrowood screens. We try to make a 7/8-inch or 6 millimeter chip.”

      The Watsons have been well pleased with the Acrowood chipper in many ways, including maintenance. “We’ve had to replace the hood on the chipper, and that’s about the only thing we’ve had to do,” Donald said. “Of course, you have wear points on a piece of equipment like this, and we’ve had to change out screens because they eventually wear. But they’re about as smooth a screen as you’ve ever seen. They just kind of slide out, so it’s really easy to change them. They have a T-handle arrangement, so it’s not a major cutting and welding job to change them. But we really don’t have to change them very often because they’re so smooth. And we take care of all the maintenance with our own maintenance crew.”

      The screens separate the chips into three categories according to size. Chips that are the correct size go to the pad for loading, overs (chips that are too large) return to a Precision rechipper to be cut to the correct size, and fines (undersize material) and sawdust are sorted out and mixed with the bark to be processed into boiler fuel.

      “The screens are the third thing we did with Acrowood that have been a big help,” Donald said. “We’ve had very little down time with those screens. We’ve replaced a few universal joints and hanger rods, and that’s it.”

      The size of the screens has made LTM Chips much more efficient. “We hardly ever overflow those big screens,” Donald said. “Our salesman recommended these screens. I told him I wanted them big enough that they’d never flood, and he said this was the size I needed, and he was exactly right.”

      Once chips leave the screens and move to the loading pad, they’re loaded into trucks and hauled to one of the pulp mill customers.

      The Watsons have no further plans to upgrade or expand LTM Chips, according to Donald. “We don’t anticipate growing larger than we are now,” he said. “We’re probably maxed out for the supply we have. We have a good supply, but if we chip more, we might get to where we hurt our supply.”

      Some of their neighbors might agree that staying the same size they are now is a good idea. Although their efficient output is great for the mill, the employees and the economy of the area, the Watsons don’t want to stretch the patience of their neighbors.

      One of the strengths of the entire operation, Donald said, is the company’s philosophy of safety first, then quality, and production third. “If you stay in that order, you won’t go wrong,” he said. “You have to have production to make a profit, but that’s not the most important thing. It needs to be safety always, and then you need to make a quality product. The cheapest thing we make is boiler fuel, but it still has to be something our customers can use to burn in their boiler, or they don’t want to buy it. With the Acrowood chipper, I’d put us up against the biggest and most expensive chip mill in the country. It makes a quality chip. Our chips are analyzed every day, and the output from the Acrowood is just steady, steady, steady.”

      What single issue has been the biggest factor in the success of all three companies? The wood procurement system, Donald said. “Our wood procurement has allowed us to increase our production with the equipment we’ve added. As a result we’re not just a small mill any more. We’re one of the larger mills in Arkansas now. When you’re bigger, it’s always easier to get what you need, so now it’s easier for us to buy wood and sell chips.”

      Will the Watsons’ enterprises stay in the family in the future? Donald said it’s too soon to say whether either of his two daughters, ages 14 and 17, will follow his footsteps into the forest products industry. “My brother has two daughters and a son, and the son is the youngest,” Donald said. “He says he’s going to come run things.”

      Over the next few years, as Pete’s son matures and decides if he wants to join the family business, the enterprises probably will not change much, Donald said.

            “I see us improving some of our equipment,” he said. “We’ll probably have to have a new drum debarker in the next five years. And we’re going to have to rebuild part of the power infeed for the mill. We could run two shifts with this chipper if we saw the need to, and we could increase our production. I don’t know if we’d double it, but we could increase it by 35 or 40 percent. But I think we’re just going to keep good, solid equipment that runs fifty hours a week and just keep doing what we do.”


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