Langley’s San Group announces $70M plan to build sawmill on Vancouver Island

The 39-year-old San Group is doubling down on its commitment to Port Alberni with a new $70-million lumber manufacturing facility that will employ 135 people

By
Times Colonist
October 22, 2018





port alberni
Port Alberni mill site
 
Calling it a return to forestry’s roots on Vancouver Island, a Langley-based company is betting heavily on the Alberni Valley with plans to build both a sawmill and a plant to manufacture wood products.
 
The 39-year-old San Group is doubling down on its commitment to Port Alberni with a new $70-million lumber manufacturing facility that will employ 135 people. San Group already owns Coulson Manufacturing in Port Alberni, which produces cedar building materials.
 
“This is where everything started in the forest industry, this is where forestry is. Why are we forgetting where the motherland was?” San Group chief executive Kamal Sanghera asked in an interview.
 
“We want to come back to Vancouver Island and do something like [lumber pioneer H.R. MacMillan] and those other guys did, we want to bring [the industry] up again where everything is at your doorstep.
 
“We want to create more jobs with what Mother Nature has given us right here and ship it right out of here instead of shipping raw lumber.”
 
San Group has purchased from Catalyst Paper a 25-acre site just north of Catalyst’s operation in Port Alberni. The site is not being used, but has an office building, warehouse and auto shop.
 
Terms of the deal have not been disclosed, but it could see Catalyst — now owned by Paper Excellence Canada — providing steam to power machinery in the new facility, and San Group providing a new source of wood chips for Catalyst’s paper mill.
 
Construction of the new sawmill is scheduled to begin in the spring, and San Group predicts it could be operational very quickly and cutting wood by the early summer.
 
Sanghera said the first phase will involve erecting a sawmill with a planer designed to cut small logs. Once that is operating they will establish the grading system and the third phase will be the establishment of the value-added plant.
 
The facility will use under-utilized fibre — small logs of hemlock, cedar and fir — from the Island and turn it into finished products.
 
Sanghera said their products will be specialty cuts using low-grade timber for finishing materials such as door jambs, spindles, bannisters, siding and flooring.
 
San Group vice-president of business development Bob Bortolin said the deal has been months in the making.
 
At one point last fall the company looked at Western Forest Products’ idled Somass plant and its 42 acres in Port Alberni as a possible expansion site.
 
“What’s happened since then is an opportunity came up with Catalyst, and it’s a project that works for them and ourselves,” he said.
 
“This new facility will be able to process small logs and there’s a direct feed from our facility to the Catalyst paper mill, and they are always struggling to have enough raw materials come to them.”
 
A Catalyst spokesperson was not available Friday, but Kathy Cloutier, director of corporate communications for Paper Excellence Canada, said fibre supply is essential for any forest company. “Fibre is the core foundation of our business and fibre supply for Paper Excellence Canada, and its mill facilities is vital as without security of fibre source there’s no security in production operation.”
 
Cloutier would not comment on possible synergies between Paper Excellence Canada and San Group as the sale of Catalyst to Paper Excellence has not been finalized. “Until the regulatory review process has [been] completed, the two operate as two separate entities,” she said. “We are engaged but not yet married.”
 
As for why San Group invested in Port Alberni, Sanghera said the setting is all the answer that’s necessary, as it’s always been the heart of the forest industry on the Island.
 
It also has a deep water port to enable easy shipping of finished products.
 
San Group already exports forest products to 21 countries.
 
Sanghera said the new mill will manufacture products for the domestic market, and the Island in particular, noting loads of lumber are ferried across from the mainland every day.
 
“Our goal is to provide some of that product that’s needed in construction on Vancouver Island,” he said. “We want to make more fibre available in the local community here.”
 
San Group has been a big believer in Port Alberni, and since purchasing Coulson Manufacturing in the spring of 2017 it has added a second shift and intends to invest in a third shift.
 
“We’ve seen the revitalization of the forest industry there and we see the potential and future of continuing to grow within Port Alberni,” said AJ Cheema, San Group’s vice-president of corporate affairs. “We’re proud to see [our expansion plans] coming to fruition and we’re moving forward and increasing jobs and putting money into the economy.”

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