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Ex-Logger Grows Business from Wood Residuals
Morbark a Key Supplier to Maryland Company that Processes Wood Presiduals into Marketable Products
By Diane Calabrese - Contributing Author
Date Posted: 6/1/2001
SALISBURY, Maryland — "I had no idea my business would get this big…In the beginning, it was me, one other guy, and two trucks. As the poultry industry in our area grew, as the mill industry grew, as the timber industry grew, we grew," said Tommy Johnson, founder and president of Eastern Shore Forest Products Inc. "Our growth was not necessarily by design. We grew by default."
But growth has come, as Tommy’s involvement in logging — and then the broader forest products industry — evolved.
The native of Salisbury, Md. grew up on his parents’ farm. After high school graduation he took a job driving a truck for Chesapeake Corporation. The job with Chesapeake Corp. exposed him to the forest products industry, and in 1980 some people at Chesapeake approached Tommy about providing contract logging services.
"If you’re raised on a farm, there’s not much you can’t do," said Tommy, "although I was as green as could be when it came to logging. I cut primarily on company lands and some private lands."
As his involvement grew in the forest products industry, he soon saw another need: poultry litter or bedding. The region around Salisbury markets roughly $1 billion worth of fresh chicken annually. Management at large poultry companies began approaching Tommy. "I had friends constantly asking me if there was a way to make (poultry) litter out of stuff left in the woods," he recalled. "I took wood chips and ground them up. It was less than desirable but better than nothing. Then some of the local sawmills started selling us their by-products, and we started making the bedding products."
Seven years later, business was booming, and Tommy decided to get out of logging to focus exclusively on forest products made of residuals. He built relationships with mills to get wood chips, sawdust and shavings. His company’s largest market remains the poultry industry, but today Eastern Shore Forest Products also sells other products, primarily mulches and industrial fuel.
In the mulch area, Eastern Shore sells to other companies that package and bag the mulch for sale to retailers, such as Home Depot. Eastern Shore also operates a yard in Salisbury from which it sells mulch to landscapers and homeowners. For a number of years Eastern Shore has supplied hog fuel to industrial wood-burning facilities, including a state-run co-generation plant that heats a prison.
Eastern Shore has 26 employees and handles a half-million tons of wood waste annually. Tommy’s office and a large maintenance facility that services the company’s fleet of 15 trucks is located on his parents’ 120-acre farm. The farm also has room for the company to store 3 million cubic feet of product under cover.
Although his parents, Elmer and Annabelle Johnson, now retired, never were employees of Eastern Shore, they have been a big help to his business. "From the day I started, my mother worked the books until we got big enough to afford bookkeeping employees," said Tommy. "She was the backbone of getting the books and (office) work done. My father was a great mentor…he had a lot of wisdom that helped me a lot. They were crucial in my success, both as mentors and in giving me actual help—just invaluable."
Eastern Shore Forest Products sits in the middle of a 200-mile area known as the Delmarva Peninsula, a strip of land including Maryland, Delaware, and the Eastern Shore of Virginia. Salisbury is a city of about 22,000; surrounding Wicomico County has a population of 83,000.
Bordered by the Atlantic Ocean to the east and the Chesapeake Bay to the west, farmers and watermen have long dominated a large percentage of the peninsula’s population. In addition to the multi-million dollar poultry industry, the region supports other agriculture and forestry. The economy has some high-tech industry, too. The region is home to six companies that design and manufacture microwave filters for the cellular communications industry, employing over 1,000 people. There are offshoots of the poultry industry, such as Perdue’s grain and oilseed division, which manufactures soy products and premium pet food ingredients. The resort city of Ocean City is only 30 miles from Salisbury and provides jobs in tourism. The region also supports businesses catering to boaters. Urban retirees seeking a more rural lifestyle combined with amenities of being near the water are moving to the area.
Eastern Shore Forest Products generally serves customers within a 100-mile radius although some are as much as 150 miles away. "We do very little advertising," said Tommy. "Most business has been through word of mouth. The folks we sell to do a lot of advertising," he added, "but we just don’t need to in the market we sell to."
Eastern Shore has invested heavily in wood processing equipment, and Morbark has been a key supplier. "I had a time constraint on when I need a chipper, and Morbark was the only company that could fill my need at the time," he recalled. His experience with Morbark’s Model 2348 whole tree Flail Chiparvestor left him satisfied with the supplier, and later he added a Morbark wood hog. "Dan Owen, the local Morbark sales rep, has been very good to work with," said Tommy, "and is very accessible long after the sale is made."
In addition to the Morbark Model 2348 whole tree Flail Chiparvestor and the Morbark 3600 wood hog, Eastern has a Caterpillar 320BL excavator equipped with a grapple and seven Caterpillar rubber-tired front-end loaders ranging in size from a 966 with a 12-yard bucket down to a small IT 24 with a 4-yard bucket. There also is a fleet of 15 trucks, most of them Macks. "I am very partial to Mack trucks and Cat equipment," said Tommy.
"Nine of the Macks are equipped with specialized blowers for blowing the various by-products directly into poultry barns," he added. "We built all the blower trucks ourselves. We have a fabrication shop on-site. We can blow off a truckload in seven minutes."
The company uses contract logger Phil McDonald to work with and feed the chipping operation. Phil’s crew cuts the timber and skids it to Eastern’s chipper, and Eastern provides the trucking.
"The Morbark 3600 is a brand-new year 2000 model and is also used at our company-owned mulch yard," explained Tommy. The Morbark wood hog processes bark purchased from sawmills plus bark from the chipping operation; the mulch it produces is sold in the mid-Atlantic region. Eastern Shore also has a stand-alone system for coloring mulch.
The Morbark Model 2348 whole tree Flail Chiparvestor handles logs up to 23 inches in diameter, "which is plenty big for me," said Tommy. "We had a special chip we wanted, and Morbark customized it for us. They have a good warranty, and we are able to do all our own maintenance." He also likes the fact that the Model 2348 is a one-person machine.
Morbark has made a series of improvements to its 2348 and 2755 Flail Chiparvestor lines. The company made more than a dozen enhancements designed to increase production and chip quality while holding down operating costs.
Morbark increased the flail drum rpm to achieve a cleaner end product with lower bark content even in hard-to-debark species and difficult weather conditions. An angled plate directs the flow of material into the infeed spout, resulting in more uniform chip quality and a higher percentage of acceptable chips.
Other modifications to improve the flow of material from the flail to the chipper also contribute to increased production and higher chip quality. A new auger system removes debris for further processing, and Morbark redesigned the operator cab.
Not only is the business heavily invested in equipment, but Tommy emphasizes good-looking equipment and hiring quality employees who appreciate it. "Our equipment is top-notch, all painted red with lots of chrome, and we put our trucks to bed every night in an enclosed garage." Tommy feels the garage was well worth the investment because it prolongs the life of the trucks.
"We have a company that attracts good people," he added. "I would rather spend an extra $5,000 on trucks and put a good guy in the seat that cares about it. I pay above-average wages to insure that I can get and keep good people. I give them good equipment and a good environment to work in. Most of my people work on commission so they can make money, and the kind of people who work here, that is what they like. My people like good-looking, well-maintained equipment; they are particular people."
One of the biggest challenges to the business in recent years has been rising fuel costs. "We spent $150,000 extra last year just due to fuel price increases," said Tommy. "Things have stabilized now, but I don’t think we will ever see the low levels we saw two years ago. We have to absorb it (the increased costs) since we are in many long-term contracts (with customers)."
When selling to customers, Tommy frequently shares information about the cost of his raw materials. "They know what I pay for raw materials," he explained. "I tell them voluntarily. I show them the numbers because I know they expect me to make a profit."
Tommy, 41, was a bachelor until four years ago. His wife, Anita, is an Eastern Shore native whose father and grandfather were loggers. "Her grandfather used to log cypress with a barge on the river," said Tommy. The couple has one daughter, Lindsey, 3.
Being single helped him when he started the company, Tommy said, because he felt more comfortable taking risks. "Risk is interpreted differently when you have a family. Every time my business doubled, you were laying everything you had already done on the line. Now I probably take less risks because I know I have folks depending on me. If I’m making an average living, and could double that with risk, I may not do that now. Otherwise, how I do business has not changed much since the early days."
Having a family also has made Tommy more sensitive to employees: "I don’t want this to be their only life. I want them to enjoy what they do here and make a good living."
Tommy serves on the environmental committee of the Delmarva Poultry Industry, a trade group for the poultry industry, and is also a member of the Maryland Forestry Association. He spends most of his free time "playing Barney" with his daughter, he said, laughing. But he also has a boat and enjoys saltwater fishing and boating with his family.
Tommy is modest when talking about the success of Eastern Shore Forest Products Inc.
"We happen to be in an area concentrated in the poultry industry, and I know this is not an option for 99% of the (wood) industry folks. We just happened to be able to tie the timber industry into what we do."
"We are more into recycling than anything — recycling waste products from the mills. The whole industry has changed. In the old days, waste would be burned or left in the woods. Now there is this whole industry." Tommy has another business, Litter Management L.L.C., that focuses on environmental issues for the poultry industry.
Tommy is optimistic about continued success in his wood by-products business. "I’m optimistic we will continue to be viable, and we will certainly take any opportunities that come our way in the future. But we have no plans to grow. Our growth has been by default, but I certainly want that to continue."
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