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Va. Chip Company Focused on Solving Problems

Colonial Wood Fiber: Virginia Chip Company Focused on Solving Problems with Mill Works, Peterson Pacific

By Staff Writer
Date Posted: 7/1/2000

WAVERLY, Va. — When Paul Higgins talks about his company, he could be describing any business. "As a company, we feel like we’re in the business of solving other people’s problems. We’ve been successful because we take that approach."

Paul is in the wood business, and he has seen his company evolve — and continue to evolve — because of his customer-oriented approach.

Paul has operated Pinecrest Timber, a logging business, for more than 20 years. Pinecrest’s two crews now perform mainly thins and chipping services on pine plantations. Another business he launched in recent years, Colonial Wood Fiber, now operates a wood yard for converting hardwood logs into chips bound for overseas. Pinecrest Timber employs about 16 workers and Colonial Wood Fiber, another seven or eight. Three suppliers to the forest products industry that have been key partners in his operations are Peterson Pacific, Mill Works, and Key Knife.

Paul, 55, grew up in Waverly, where he lives and works. His family operated a sawmill, and he grew up in the forest products industry. He was educated at North Carolina State University, where he earned a bachelor’s degree in wood technology. After serving a hitch in the Army he went to work for a bank in North Carolina. Paul went on to earn an MBA from the University of Virginia and launched Pinecrest Timber in 1978 when his family sold their sawmill to Union Camp.

Waverly is a small community in Sussex County, located about 50 miles below Richmond in the coastal plain of southeast Virginia, a relatively flat, low-lying region with abundant farms and forests. Neighboring Surry County holds an annual local event called the Pork, Peanut and Pine Festival — an indication of what is near and dear to the people who live in the region. In addition to hogs and peanuts, farms in southeast Virginia grow cotton, soybeans, and corn. Waverly is situated about 15 miles south of the mighty James River and along U.S. 460, which decades ago was a veritable thoroughfare for travelers going to Virginia Beach in the summer months; it is the main highway connecting the rural region to Hampton Roads in the east and to Interstate 95 about 20 miles to the west.

Paul has a wood paneled office, his desktop neatly organized and a laptop computer on an adjacent table. On one side of his desk are several topographic maps, on the other, copies of the Wall Street Journal and business magazines like Forbes.

Pinecrest Timber consisted of a small logging crew until about 1980 when Paul added whole tree chipping. He invested in a chipper and began chipping hog wood for Georgia-Pacific. A few years later he was asked to consider pine plantation thinning and chipping for Champion International, and he agreed to take it on. The volume of work required him eventually to add a second crew. Within a few years, however, Champion made changes to the paper products being made at its mill in Roanoke Rapids, N.C., that required cleaner, bark-free chips, and chain flail debarking technology had yet to be developed. As a result, Paul’s company began working with Stone Container, which had a mill in nearby Hopewell, making kraft paper. Now, both crews are working for Smurfit-Stone, newly named since Smurfit and Stone merged. For the timber harvesting side of the operation, Pinecrest Timber is equipped with a pair of Tigercat 720 feller-bunchers, a Hydro-Ax 411 feller-buncher, Timberjack 360 and 460 skidders, and a Prentice loader. Overseeing all of this is operations manager Michael Everett, who has been with Paul most of the 20-plus years that Pinecrest Timber has been in business.

Paul decided to invest in clean chipping technology about three years ago as the paper companies moved increasingly to high quality chips for their paper products. "There was an emphasis on quality," he explained. "We felt like it was coming. We had to get the quality we needed to change over to clean chips."

Paul began gathering information on machines of two suppliers and then looked at them at the Atlanta Expo. "We felt like Peterson Pacific was the one we wanted to look at," he said. It was not an easy decision; Paul had ties to another equipment manufacturer that went back 20 years. "You look at one, you try to keep an open mind; you look at another one, you try to keep an open mind," he said. A factor that worked against Peterson Pacific somewhat was that, at the time, the nearest dealer was in South Carolina. (Pioneer Equipment, a dealer for Peterson Pacific, now has a location in Richmond.)

The Peterson Pacific 5000 machine had only one engine compared to another supplier’s system that had two engines — one for the chain flails and one for the chipper. Paul was convinced the Peterson Pacific machine, with one engine, would be more economical to operate because of the savings in fuel.

Other factors also weighed in Peterson Pacific’s favor. The company’s machine had some features that its competitor’s lacked. The Peterson Pacific machine appeared easier to operate, and Paul thought the chain life would be better. "We liked the idea of one engine," he recalled. "It was also much more streamlined and better put together. We felt like it was going to be the better machine to run." The Peterson Pacific machine also offered better "roadability," as Paul put it. It weighed considerably less, enabling the use of a blanket permit in place of special trip permits required to transport heavy loads on the highway.

Paul used a spreadsheet computer program to list and compare the various features of the two machines before making a decision, but taking a hard, hands-on look also was a part of the process. "You’ve got to believe in what you see," he said. "There were enough factors to convince me that Peterson Pacific was a superior machine."

The fact that Peterson Pacific’s dealer was two states away was of marginal importance to Paul’s decision. "We rely on a dealer for technical expertise, warranty service, and parts," he said. Distance was not an issue for any of those considerations.

Paul had a quick, one-word answer when asked if he was pleased with his investment in the machine: "Absolutely."

"And in every way," he added. Peterson Pacific designed and built the machine with ease of maintenance in mind, he said. The machine is equipped with replaceable Teflon wear plates, for example. Chain life actually exceeded Paul’s expectations. "There’s very little down time, if any. I’m tickled to death with it, really."

Another difference was that Peterson Pacific’s machine had a Key Knife system. Key Knife is a leading supplier of disposable knife chipping systems for the forest products industry. The company’s knife systems are used in whole log chippers, including portable units, brush chippers, and sawmill applications. Paul talked to Key Knife representatives and also met with them at the Atlanta Expo. "They’re smaller and safer to handle," Paul noted.

In evaluating two different cutting systems, Paul tried to determine which would cost more. Would a disposable knife system be more expensive? "I don’t have it down to the penny," he said, "but it does not cost any more, and it eliminates a messy job."

"I highly recommend it," said Paul of the Key Knife system. "They’re good people to deal with."

The Key Knife system has two-sided knives. When one side is worn, they can be flipped and the other side used. Chipping pine, Paul’s company uses the knives about two days before changing them. The system also can be re-honed — not sharpened — several times for additional life.

Paul formed Colonial Wood Fiber a few years ago to operate a wood yard for Stone, which at the time was reorganizing its wood yard operations. The new business entity operated with a Price Industries portable drum debarker, a Morbark chipper, a few loaders and a slasher. The company mainly produced chips for the Stone Container mill but also took incoming logs, bucked them to 5-foot lengths, and loaded them on railcars for the mill, providing these services for a few years until it was no longer needed. Colonial Wood Fiber also operates a wood concentration yard in Caroline County, about a 30-45 minute drive north of Richmond. Last fall, Paul moved some of the equipment from Caroline to Hopewell, where Colonial established a wood yard to make hardwood chips for export to Japan.

In setting up the new Hopewell wood yard, Paul’s experience with the Peterson Pacific 5000 in-the-woods chipping machine led to his decision to invest in a second Peterson Pacific 5000. The company’s first machine was powered by an 800 hp Cat engine and was equipped with two chain flails. For the newest application, Paul chose a Peterson Pacific machine powered by a 990 hp Cat electric engine. The machine also is equipped with a third chain flail. Technicians servicing the machine can hook a laptop computer up to it for troubleshooting. Paul plans to add a five-year, 10,000 hour warranty.

The Hopewell wood yard began functioning in December. Winter probably was not the most ideal time for the start-up, Paul noted. Bark is harder in winter months and more difficult to remove. Freezing temperatures are another wrinkle. Perhaps not surprisingly, the bark content of the chips was higher than anticipated. "We did a lot of tweaking and trying different things in an effort to regulate bark content," he recalled.

The solution turned out to be a Super Beaver Portable Chip Screen supplied by Portland, Ore.-based Mill Works Inc. The Mill Works portable chip screen segregates over-size and under-size material. Chips that are too big are circulated into a rechipper to be reduced to the correct size. Fines are separated out. "We had it on line in about 15 minutes," said Paul. "It’s done real well." Acceptable chips have averaged over 95%.

The Mill Works machine also enabled more uniform loading of trailers because it evened out surges from the chipper. "It helps load the trailer evenly and smoothly," said Paul. The screen has a surge bin with a feeding mechanism to drop chips to a thickness screen; after screening, acceptable chips flow constantly on the conveyor and are top-loaded into waiting trucks with chip trailers.

The Mill Works screen helped the company in a number of other ways. The screen’s diesel generator produced extra electrical capacity that was harnessed to power two conveyors that carry away flail bark debris from the Peterson Pacific chipper into a second trailer. The screen also is totally portable and can be quickly, easily moved to allow clean-up activities.

Peterson Pacific offered to make a screen but also recommended Mill Works to Paul. "I felt there were some advantages in having a machine put together by one person," he said. He also conferred with a Mill Works customer who had experience with the company’s portable chip screen.

In his spare time, Paul enjoys hunting quail and deer, fishing and golf — although, like many businessmen, he doesn’t have as much time for his leisure pursuits as he would like. He is a member of the Waverly Ruritan Club, the Virginia Forestry Association, and the Forest Resources Association, formerly the American Pulpwood Association. He and his wife, Anne, have two sons. His youngest son, Asheton, graduated from high school this year. His eldest son, Paul Higgins IV, who goes by the nickname "Trace," is 28 and is a project engineer for Norair Engineering, which specializes in heavy mechanical construction. Paul has broached the subject with Trace of entering into the business with him. "We’re talking," he said.

The forest products industry is undergoing change, Paul noted. "It’s anything but set in its ways, especially the last 10 years." Industrial forestry companies have been moving away from land ownership, he observed. Some companies, like Stone and Smurfit, traditionally have owned little or no forest lands. In recent years, however, more companies have moved in the same direction. Chesapeake Corp. divested its timber holdings, as did Bear Island. Georgia-Pacific opted to spin off a separate entity, Georgia-Pacific Timber.

Industrial forestry companies no longer want to perform certain activities, he noted — like logging. "We’re seeking niches in places that are more specialized." Hence the company’s move into chipping and its wood yard operations.

"What do they need done? We want to figure out what they need to get done and take care of it and do it in a professional, business-like manner, and to do it consistently."

In the past, Pinecrest Timber has performed thins for industrial forestry customers on a contract basis, but Paul believes the business relationship may be changing. "It’s open to question," he said. "There are changes going on in the industry." Some of the industrial forestry companies have indicated they want to obtain the fiber they require through wood dealers and down-size their procurement organizations. Although he still has a backlog of contracts that will keep his crews busy for at least six months, Paul has begun the process of talking to land owners and buying timber land.

"The more important thing to me is land management," said Paul, who owns timber and uses several forestry consultants for his own property. "We’re creating forests if we do it right. That to me is every bit as important, if not more so," than focusing solely on timber harvesting.


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