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Volume 5, No. 04 >> Supplement, Canadian PLANT >> November/December 2010

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Price of EMISSIONS CCEMC has money to spend on green innovations HIGHLIGHTS Forest industry is looking ahead DIRTT gets close to its customers AFS drives controller sales in India BC innovator’s groundbreaking technology

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Editorial

Aid SME innovation

C

anada’s pokey economy is upsetting the tummies of the nation’s chartered accountants. Only 39% of those answering a national survey expressed optimism about the next 12 months. That’s down by 18% three months ago. And September numbers for manufacturing shipments likely had them grabbing the antacids. Statistics Canada reported a 0.6% decrease with 13 of 21 industries registering lower sales.

You’d think manufacturers have reason to be more pessimistic than the number crunchers. The sector shrank by 28% last year with more than 185,000 workers losing their jobs. Plants have recovered about 45% of their production, but are still off prerecession levels by 18%, so it’s too soon to break out the party hats.

Yet, according to the results of PLANT’s 2011 Business Outlook “Innovation Advantage” survey, they’re feeling pretty good about the future.

The survey of 384 senior manufacturing executives from across Canada – most of them leading small to medium-sized companies – are concerned about economic conditions, but expect orders and sales dollars to increase, as will prices and profits.

They see the economy picking up over the next three years so they’re preparing for expansion with plans to hire employees and invest in process improvements, facilities, technology, training and innovation.

Statistics Canada has just released the results of an innovation and business strategy survey for 2009 that reports only 18% of Canada’s enterprises focus on new or significantly improved products. More than 77% prefer maintaining or expanding the sales of existing goods and services.

The “experts” are pushing innovation as key to winning in the new global economy where winners must be agile, imaginative and responsive to rapidly shifting market dynamics. They have a point.

A comprehensive Canadian Manufacturers & Exporters (CME) study of product design and development shows winning innovators derive more than 35% of their revenues from new or significantly improved products, and do so because they invest more than the laggards in R&D, commercialization and market research.

The PLANT survey shows SMEs are on the right track, but they have some work to do.

Although they consider innovation to be an important part of the game plan, they identify quality as their top competitive advantage. Innovation appeared well down the list.

Manufacturers are investing in research, development and commercialization of new products, but 49% are not taking advantage of the SR&ED tax credit offered by the federal government and 24% are unaware of any financial incentives.

Clearly, SMEs need some help getting to the next level. CME president and CEO Jayson Myers wants governments to improve the investment environment by leaving more cash in manufacturers’ hands. Federal budget time is coming up. The CME is encouraging the Harper government to acknowledge the direct relationship between cash flow and investment in innovation by extending the write-off for machinery and processing technologies, and to make the SR&ED tax credit refundable.

That might be a bit of a hard sell to a cash-strapped, minority government wallowing in deficit, but Stephen Harper and friends would be wise to consider the impact a floundering manufacturing sector has had on the economy during the past two years.

Joe Terrett, Editor Comments? E-mail joe.terrett@plant.rogers.com.

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Features

>> TRENDS

5 Forestry The FPAC wants the federal government to continue initiatives that will help the forest products industry complete its competitive transition to bio-economy contributor.

Clean Tech There are 106 companies commercializing clean technologies in Canada’s prairie provinces.

Energy It will take taxes and other measures to make carbon capture and storage a viable technology for dealing with greenhouse gas emissions.

>> SUSTAINABILITY

6 climate change CCEMC is taking funding from Alberta’s heavy carbon emitters and parcelling it out to help finance worthy climate change innovations.

>> OPERATIONS

7 production DIRTT is staying close to its markets to produce innovative moveable walls that provide firms with flexibility in their office spaces.

>> MANAGEMENT

8 exporting AFS is opening up markets in India and other Asian countries for its CNG controllers and software products.

>> INNOVATION

9 Machinery A BC innovator applies his groundbreaking sonic technology to dig into geothermal projects and environmental investigations.

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Departments

4 Industry View 5 PLANT Pulse 10 Plantware Product Showcase Events 11 Postscript

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Canadian PLANT WEST 3

Departments

>> Industry Views

Dokie Wind Project switches on VANCOUVER: The Dokie Wind Project, BC’s largest wind farm, jointly owned by Plutonic Power Corp. and GE Energy Financial Services, has begun generating electricity.

Mortenson Canada Corp., the project’s engineering, procurement and construction contractor, erected 48 wind turbines. Nine of them have completed final commissioning tests and are ready for operation. The substation and transmission lines are also commissioned and energized.

Prior to commercial operation, the project, located 1,100 kilometres northeast of Vancouver near Chetwynd, will sell energy generated during commissioning to Powerex, a subsidiary of BC Hydro. “The start of energy generation at the Dokie Wind Project represents Plutonic’s and GE Energy Financial

Workers check a turbine tower base at the Dokie Wind Project.

PHOTO: PLUTONIC POWER

Services’ first wind project in Canada and a solid new growth platform for Plutonic in wind energy,� said

Nexen investing $2.7B in 2011 CALGARY: Nexen Inc. plans to spend between $2.4 billion and $2.7 billion next year to advance its oil and gas projects in Canada and abroad.

The Calgary-based company expects to produce the equivalent of between 230,000 and 270,000 barrels of oil per day next year. That’s about the same as this year but with a bigger contribution from its Long Lake oil sands operation in northern Alberta.

Nexen is looking at Long Lake to produce between 38,000 and 45,000 of bitumen per day, up from about 25,000 barrels per day this year.

The company is also involved in North Sea offshore oil and gas production, shale gas exploration and development in the US and Canada and oil exploration and development in Nigeria and Yemen.

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$235M gas plant for Alberta CALGARY: AltaGas Ltd. will construct a 120 million cubic feet per day (Mmcf/d) gas processing facility and a gas gathering system in the Montney resource play, approximately 100 kilometres northwest of Grande Prairie, Alta.

The plant, located in the Gordondale area, will be equipped with liquids extraction operations to capture liquids from natural gas supplied by Encana Corp., an energy company based in Calgary.

The $235 million gas processing facility and gathering system will be in-service by late 2012, but by using existing infrastructure in the area, AltaGas anticipates providing processing for early production by mid 2011.

The Montney resource area is one of

>> Careers Lignol Energy Corp., a developer of cellulosic ethanol technology based in Vancouver, has appointed Colin South chief technology officer. South, a member of Lignol’s board of directors, was the founding president of Mascoma Corp. and previously held senior leadership positions in the life sciences industry with Fonterra Co-operative Group and ViaLactia Biosciences.

Stephen Frasher resigned as president and

Safety_Tags 1-3V.indd 1

4 Canadian PLANT WEST

Donald McInnes, vice-chairman and CEO of Plutonic Power.

GE Energy Financial Services acquired the wind farm last year from EarthFirst, which had suspended work on the project as it restructured under the Companies Creditors’ Arrangement Act. GE Energy Financial Services and Plutonic, through their jointly formed Dokie General Partnership, announced the resumption of project construction in December 2009.

The $228-million project, which includes a substation and seven kilometres of 230 kV transmission lines, will generate 320,000 to 340,000 megawatts hours annually.

Commercial operation is to begin early next year.

GE and Plutonic also jointly developed BC’s largest independent run-of-river hydro project, the East Toba River and Montrose Creek hydroelectric project.

the largest, low cost, liquid-rich resource plays in the Western Canadian Sedimentary Basin. AltaGas said the plant will provide a midstream solution to a number of producers in the area.

AltaGas is a Calgary-based energy infrastructure company.

BioExx ramping up production TORONTO: BioExx Specialty Proteins Ltd. is now operating its Saskatoon canola protein isolate plant on a continuous basis.

The Toronto-based food processing company said it’s ramping up commercial production to a 24/7 schedule as the needed certifications are achieved.

Bioexx applies a patented and patentpending technology that it says extracts proteins from oil seeds. Key benefits of the processes are less energy used and a higher food yield.

BioExx is also working on a second plant in Minot, ND and intends to construct additional and larger processing facilities on a global basis.

Day4 collaborates on PV BURNABY, BC: Day4 Energy Inc. is combining its solar photovoltaic (PV) technology with German firm Roth & Rau AG’s production technologies to develop what the two companies are calling “the next generation� of crystalline silicon solar modules.

The companies have announced a three-way memorandum of understanding that also includes Alinement BV, a prospective Day4 solarSYSTEMS partner in the Netherlands that would produce the modules in 2012 with an initial capacity for 80 megawatts.

Roth & Rau’s PV cell and hetero-junc-

CEO of Western Forest Products Inc. in Vancouver. Board chair Dominic Gammiero has taken over as CEO. The company has eight sawmills and four remanufacturing plants.

Ven CĂ´tĂŠ has retired as president and CEO of ZCL Composites Inc., an Edmonton-based manufacturer of fibreglass underground storage tanks. Succeeding him is Rod Graham, a director and vice-president of the company.

Bruce Aitken, president and CEO of methanol producer Methanex Corp. in Vancouver, has

tion turnkey manufacturing line will be combined with Day4’s advanced PV cell, module and production technologies to produce modules with increased cell efficiency and temperature performance.

The companies said the aim of the collaboration is to minimize production steps by integrating wafer, cell and module production.

Roth & Rau said its hetero-junction solar cells offer an efficiency potential of more than 20% while delivering “favourable manufacturing costs. It said adding Day 4’s contacting technology further enhances module efficiency.

The companies plan to have 500 megawatts of manufacturing capacity in a single Netherlands location.

PLANT

Peak wins $3.3M Alaska deal CALGARY: Peak Energy Services Trust has won a second wastewater treatment contract worth $3.3 million with a major international oil and natural gas producer located on the north slope of Alaska.

Peak subsidiary Sanitherm Inc. is in the final stages of constructing a water and wastewater treatment system to support drilling camps for an unnamed customer.

The Calgary-based company said the first system announced in May will service approximately 120 personnel and will include a Sanitherm SaniBrane Membrane Bioreactor, a Sanitherm/Hydropro Reverse Osmosis for potable water treatment and a Sanitherm/Pennram incinerator for sludge and garbage disposal.

The second system will be delivered in March next year.

Peak Energy Services Trust is a diversified energy services organization operating in western Canada and the US.

joined Enerkem Inc.’s board of directors. Montreal-based Enerkem’s proprietary waste-tobiofuels technology produces biomethanol as an intermediate for the production of ethanol.

The company has a waste-to-biofuel plant in Edmonton.

Alberta Oilsands Inc., a Calgary-based energy company, has appointed Andrew Constantinidis as vice-president of finance and business development. Prior to this appointment he was vice-president and CFO of Calgarybased Eurogas Corp.

4/14/09 3:03:33 PM

November/December 2010

Industry << Trends

Economic developments and trendS

Western exports to rise: EDC

A

lberta’s international exports are forecast to grow by 16% this year and 5% in 2011, according to a provincial forecast by Export Development Canada (EDC). The province’s exports declined 36% in 2009.

“In 2011, we see continued expansion, but without the kick from higher energy prices Alberta’s overall export growth will ease off this year’s sturdy pace. The province’s strongest performing sectors in 2011 will be industrial goods and machinery and equipment,” said Peter Hall, EDC’s vicepresident and chief economist.

Primary energy exports account for nearly 69% of Alberta’s exports, which are forecast to grow 24% in 2010 and 4% in 2011. Hall said a slowing global economy and bloated inventories will weigh on crude oil prices next year.

Natural gas exports will rise 6% in 2010 and 8% in 2011, driven mostly by market price. The forecast calls for gas prices at Henry Hub to average $4.6/mmbtu in 2010 and US$5.4/mmbtu in 2011. High production costs and declining conventional production in the maturing Western Canadian Sedimentary Basin will likely lead to falling export volumes through 2011.

Hall said exports of crude and petroleum products will rise 31% this year, principally on higher product prices. “This source of growth will turn slightly negative in 2011, limiting export growth to only 3%.”

The industrial goods sector is the second largest export segment in Alberta, accounting for nearly 11% of the province’s total. Alberta’s industry, heavily weighted towards petrochemicals and fertilizers, will grow by 15% in 2010 and 8% in 2011.

Machinery and equipment (M&E) industry accounts for 6% of the province’s total exports, and is forecast to contract by 17% in 2010 before rebounding with 10% growth in 2011.

Manitoba’s international sales will decline 2% this year, followed by a 6% rebound in 2011. Although the energy sector stands to benefit from rising commodity prices, other sectors such as agricultural machinery and equipment have yet to recover from the global downturn.

EDC is forecasting a 7% increase in Saskatchewan’s exports, followed by a 9% rise in 2011. Extreme wet weather hampered exports of grains and oilseeds, a surge in energy and fertilizer sales have compensated for the weakness.

Rising commodity prices have also been helpful in boosting export earnings.

BC’s exports will get a boost from forestry, energy and metal mining thanks to higher prices and expanded capacity.

EDC forecasts overall exports to rise 13% this year, followed by another 10% increase in 2011. It says this outlook is supported by the continued development of shale gas fields, new capacity in coal and metal mining, the reopening of previously idled pulp mills Canadian exports are forecast to rise 12% in 2010 and 6% in 2011. Nationally, economic growth is expected to rise 3% in 2010 and 2.2% in 2011. Global economic growth is pegged at 4.3% in 2010 and 3.9% in 2011.

Download EDC’s Global Export Forecast at www.edc.ca/gef.

Provincial export forecast 25 20

per cent

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>> Clean Tech Clean tech will be key to the economies of Canada’s prairie provinces, according to the 2010 SDTC Cleantech Growth and Go-To-Market Report, Prairie Edition.

It shows a compound growth rate of 47% in Canada (high growth and more established sectors) between 2007 and 2009.

Currently, 106 clean technology companies are in the process of commercializing new products across Alberta, Saskatchewan and Manitoba.

Sixty-four per cent of the companies produce technol-

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The Forest Products Association of Canada (FPAC) is calling on the Harper government to set business conditions in the next federal budget that would help the industry become greener, more competitive and a contributor to the bio-economy.

Avrim Lazar, president and CEO of FPAC, told the House of Commons Finance Committee that during a fragile economic recovery, it’s also essential to renew and refocus initiatives already helping to transform the industry.

FPAC wants the federal government to support the industry’s green transformation by enhancing access to capital and mitigating some of the risks associated with the adoption of new technologies. It’s asking for an additional $300-million for the Investment in Forest Industry Transformation program and to make the untapped $500 million in the SDTC NextGen BioFuels fund available for all bio-energy and biotechnologies to advance shovel-ready projects in rural areas.

It’s also recommending renewed funding and a refined focus for programs such as the Canada Wood Export Program, the Wood First Initiative, Value to Wood, Leadership for Environmental Advantage in Forestry and FPInnovation’s Transformative Technologies Program, making their scope product- and region-neutral.

“The economic promise of new technologies and products is truly immense,” said Lazar. “We are working hard today to secure the jobs of tomorrow but to succeed we need the government to get it right.”

The $54-billion-a-year forest products industry represents almost 2% of Canada’s GDP. Visit www.fpac. ca for details of the FPAC submission to the Finance Committee.

Prairies’ future is clean tech

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PEI

Accelerate forest eco-improvements: FPAC

2010 (total 12%)

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>> Forest products

2011 (total 7%)

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The forest products industry is sharpening its competitive edge but it wants the Harper government to continue initiatives that will help it become a major contributor to the bio-economy.

PHOTO: iSTOCKPHOTO

BC Territories

ogy products, 32% are technology-enabled services, and 4% are large-scale or distributed processors.

And nearly 75% of the companies created as a result of a concept developed by an entrepreneur. Only 9% were created as a result of technology developed through academic institutions.

While the report found clean tech industries continue to require assistance in accessing capital, investment required by companies is less than might be anticipated – 96% of the companies surveyed were found to have capital requirements of between $1 million and $30 million.

Visit www.cleantechnologyreport2010.ca for a copy of the report.

>> ENERGY CCS a pipedream without taxes: report Carbon capture and storage (CCS), a new technology that pumps greenhouse gases deep beneath the earth’s surface, won’t get off the ground without taxes or government policies, says a study commissioned by Environment Canada.

Calgary-based consulting firm AECOM gave the report to Environment Canada in May. The Canadian Press obtained a copy under the Access to Information Act. The study says more research and development needs to be done to lower the cost of carbon capture and turn the technology into a moneymaker.

Ottawa and the provinces have already spent about $3 billion in recent years on carbon capture and storage.

The Alberta government alone has committed $2 billion to various carbon-capture projects.

Neighbouring Saskatchewan is home to one joint Canada-US carbon-capture project.

An aging oilfield in Wayburn, Sask. buys the odourless and colourless CO2 gas from a coal gasification plant in North Dakota and pipes it into an underground reservoir to draw more oil out of the ground.

But the technology remains costly and largely unproven. The report flagged lingering concerns about the technology, such as greenhouse gases escaping from underground and rising into the atmosphere.

“Most concerns are related to the storage of CO2 and the potential for accidental release from the storage sites. The resulting liability issues could hinder the large-scale commercialization of CCS.” The study’s author says taxes are among several options that include cap-and-trade or subsidies for companies with good environmental track records.

Canadian Press

Canadian PLANT WEST 5

Sustainability

>> Climate Change

The price of

emissions Heavy carbon emitters fund climate change innovation

By Kim Laudrum

D

arryl West, president of Calgarybased Evergreen Energy Technologies Inc., is pumped about the future. After 20 years installing equipment at natural gas well sites, the mechanical engineer, and Evergreen’s sole employee, developed a 100- to 200-watt stand-alone electric power generating system for remote off-grid locations. Called the Power Pod, it’s a hybrid system that combines solar photo voltaics with a new technology: direct methanol fuel cell (DMFC).

West says the hybrid power generator is far more reliable and efficient in the cold, northern Canadian climate than solar alone. And it emits less greenhouse gases (GHGs) than thermoelectric generators currently in use at well sites.

It’s an idea that has earned Evergreen a commitment for $250,000 from Alberta’s Climate Change and Emissions Management Corp. (CCEMC). Evergreen is one of the first 16 projects to gain the organization’s final approval – and commitments worth $71 million – announced in June 2010. An arms-length, not-for-profit organization, CCEMC is tasked with administering the province’s $187 million – and growing – cuss jar for heavy carbon emitters.

Since 2007, regulation obligated Alberta companies that produce more than 100,000 tonnes of emissions to report and comply with performance standards to achieve a 12% reduction from 2005 levels.

One compliance option is to pay into the Climate Change and Emissions Management Fund at $15 per tonne emitted over target. The monies collected are diverted to the CCEMC and are intended to leverage financing for innovative projects that mitigate GHG emissions through greening energy production, energy conservation and efficiency, carbon capture and storage, and adaptation. West came up with an idea that fit the bill.

“Rather than use compressed hydrogen as a fuel source for this particular fuel cell, we use liquid methanol to convert electric power on demand,” West says.

Evergreen’s strategy is to replace thermoelectric generators at well sites throughout Alberta, and beyond, with its solar and DMFC hybrid system. He says a DMFC system is 10 times more efficient in converting fuel into power than a typical thermoelectric system.

But what West is really pumped about is, well, pumps. Where instrumentation is pneumatically operated, he sees an opportunity. Pneumatic pumps run on the

6 Canadian PLANT WEST

natural gas that producers have gone to the trouble of drilling, he explains. The gas is then vented back into the atmosphere.

“All these pneumatic devices bleed gas.

Natural gas is mostly methane, which is about 20 times as bad as CO2 on a per volume basis in terms of a GHG effect.

In the case of, say, one pneumatic pump, we’re looking at about 400,000 static unit feet per year of vented gas. In terms of GHG emissions, that’s the equivalent of 170 tonnes of CO2 per year. And that’s just one site.” He estimates there are about 120,000 natural gas wells in Alberta alone.

Evergreen has also developed an electrical chemical injection pump as an alternative to pneumatic equipment currently in use. “That’s really where the biggest economic payout would be for the customer and the benefit for reduction in emissions,” West says.

Projects ramp up It’s too early to say whether or not the CCEMC will have an impact on stimulating innovation in clean technology, energy efficiency or renewable energy. To date, not one dime of the allocated funds has been spent, according to CCEMC’s managing director Kirk Andries. Those

>> Approved for funding

T

he following 16 climate change projects representing $71.3 million were approved

by CCMEC in June. Proponents are now preparing contracts before moving forward.

Cleaner energy production, carbon capture and storage E-T Energy Ltd., $6,862,000: Poplar Creek project, ET-DSPTM for development of Athabasca Oil Sands.

ESEIEH consortium, a joint venture of four companies: Harris Corp., Laricina Energy Ltd., Nexen Inc. and Suncor Energy Inc., $16,474,839 : Enhanced solvent extraction incorporating electromagnetic heating.

HTC Purenergy Inc., $315,000: HTC Purenergy CO2 capture FEED study for Devon’s Jackfish SAGD facility.

GE, $2 million: Ceramic membrane-based technology for H2 production with CO2 capture and sequestration.

Suncor Energy Inc., $2,500,000: OTSG Oxy-fuel Demonstration Project.

Energy efficiency projects Evergreen Energy Technologies Inc., $250,000: Reliable power for remote locations.

A bucket wheeler digs into oil-rich bitumen near Fort McMurray, Alta.

who represent the approved projects announced in the spring are currently preparing contribution and licensing agreements. But he says interest is high in developing ideas to mitigate GHG emissions using the CCEMC commitment as leverage to attract further financing.

The first of three Calls for Expression of Interest since late 2009 garnered 223 submissions, representing requests for $1.6 billion from the fund. “We had to wean them down to the 16 best ones,” Andries says. (See Approved for funding.)

The second call narrowed the pool to energy efficiency projects. Fifty-two projects were shortlisted to 17 in October. At this writing, the proponents were preparing business plans for a Dec. 1 deadline before moving forward to the final cut.

The third call, this time for projects in renewable energy, went out in October. The deadline for the ten-page submission was Nov. 4. “We want to make darn sure we get the best ideas out there,” Andries says.

May-Ruben Technologies Inc., $569,704: BFE thermally driven refrigeration system.

Nova Chemicals Corp., $700,000: Energy footprint reduction for ethylene manufacturing.

Suncor Energy Inc., $790,905: Alberta oil sands energy efficiency and GHG mitigation roadmap.

Great Northern Power Corp., $1.57 million: Conversion of waste heat from reciprocating engines into electricity, using Great Northern Power’s expander system.

Genalta Power Systems Inc., $1.849 million: Waste energy to power utilization within an amine facility.

Renewable energy projects Enerkem Inc., $1.8 million: Reduction of GHG emissions through greening biofuel production and CO2 utilization, from pilot plant to commercialization.

City of Medicine Hat, $3 million: Medicine Hat concentrating solar thermal power project.

ECB Enviro North America Inc., $8.2 million: Lethbridge Biogas, biogas cogeneration project.

Plasco Alberta Inc., $10 million: Plasco Alberta renewable energy and waste conversion project.

Enmax Corp., $14.5 million: Home generation.

PHOTO: iSTOCKPHOTO

Surprisingly, some of Alberta’s heavy carbon emitters were recipients of millions of dollars from the CCEMC. “It didn’t escape my notice that as a recipient of the fund, I was standing on the same platform as a representative for Suncor,” West told PLANT. Three carbon capture and storage projects received 30% of the allocated $71 million in funding in the first round of CCEMC projects, even though the Alberta government has already committed $2 billion to four carbon capture and storage projects through a different fund.

Andries explains. The province of Alberta has set rules around how the funding can be allocated. The fund is intended to help finance “the best projects we can get our hands on.” He points out that between 100 and 110 of Alberta’s heavy emitters pay into the fund. These firms are responsible for up to 65% of Alberta’s GHG emissions.

“These emitters are submitting funds to meet compliance. I’ve heard the criticism that the fund allows heavy emitters to ‘pay as you go’. But even if you are a contributor, if you have a brilliant idea that will help you mitigate greenhouse gas emissions, we are open for business and we will entertain your idea,” Andries says. He also notes the adjudication team comprises third-party experts in engineering who collectively evaluate each project using a consensus process and an independent fairness judge oversees the process. PriceWaterhouseCoopers scrutinizes each project’s financial due diligence.

“Our endgame is reduction of greenhouse gas emissions,” says Andries.

An ideal project would involve lots of low-cost GHG reductions that can be broadly applied across the marketplace.

But bright ideas take some time to develop. CCEMC’s challenge will be to accelerate innovation and help turn those ideas into practical applications that will tame Alberta’s greenhouse gas emissions.

Kim Laudrum is an award-winning writer based in Toronto, who specializes in sustainability issues. E-mail klaudrum@rogers.com.

Comments? E-mail joe.terrett@plant. rogers.com.

November/December 2010

Production << Operations

Staying close to the customers

By Nordahl Flakstad

Doing it right the first time at one of DIRTT’s plants.

PHOTO: DIRRT

M

aking moveable, reusable interior walls is DIRTT Environmental Solutions’ core business but the Calgary firm is also turning conventional manufacturing wisdom on its head.

DIRTT’s customized modular, floor-toceiling walls for commercial buildings employ a series of standardized components that fashion potentially infinite varieties of wall-related solutions to meet specific customer needs.

Many manufacturers centralize operations to capture economies of scale thought to be available through repeatability and batch production. In many ways, DIRTT is headed in the opposite direction.

With a name derived from the slogan “Doing it right this time,” it began production at two Calgary locations in 2005.

In 2009, the widely held private company set up an 82,000 square-foot wall-manufacturing facility in Savannah, Ga. Now, it’s looking for an additional US location in California or Arizona.

DIRTT’s aim is to have production pods within 500 miles of all its major North American markets. Such distributed manufacturing makes sense, says CFO Scott Jenkins. He notes weighty wood, glass and aluminum components are fairly generic and readily accessible continent-wide from local suppliers. So, with relatively heavy inputs and finished products, proximity to sourcing and markets is a definite advantage.

This manufacturing version of the 100-mile diet, now popular in culinary circles, underlines DIRTT’s commitment to sustainability, which aligns with the environmental vision of company founder Mogens Smed. He led modular-furniture maker SMED International until its sale to US-based Haworth Inc., then he headed Evans Consoles Inc., another Calgary firm that produces control-room furnishings for power plants, pipelines and similar operations. Combining his manufacturing background with a growing interest in smart technology, Smed became DIRTT’s founder and CEO. The company’s success is closely linked to ICE, a 3D proprietary software that wraps smart design, production and marketing into one tool. And it’s licensed through ICE Edge Business Solutions, a DIRTT subsidiary formed in 2007, which now has development offices in Calgary and Salt Lake City, Utah.

DIRTT co-founder Mark Greffen worked with SMED International and came to Smed’s new company with credentials in engineering, manufacturing operations and systems integration.

He was very involved in developing ICE, which he describes as “a true front-toback configuration in a single-solutions set (for manufacturing)” that’s licensed to a number of third parties, including furniture manufacturers and data-centre

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DIRTT combines smart tech with production pods designers. Licensing in Europe and Asia is also under consideration.

Jenkins describes ICE as tool for clients and an internal tool for project management and manufacturing operations.

“ICE has been pivotal for our growth” he says. “For customized manufacturing, you need to be reliant on technology. We need to embrace it – we can’t do it the old way.”

Configuring solutions ICE is not designed to supplant existing off-the-shelf software used by architects and other designers, but as an adjunct to existing tools, such as AutoCAD. In conjunction with those systems, the software provides full 3D functionality, pricing, estimates, parts lists and shop drawings. Not only does it supply clients with 3D renderings of what DIRTT walls will look like in a client’s premises, the data also feeds directly into shop-floor CNC machines.

“We wanted to arm our sales force and distribution partners with a tool that would allow them to configure solutions that did not require any value added work after it left them. ICE is a powerful tool set that’s easy to use and makes the specification and engineering invisible to the user,” says Greffen.

Increased computing power, even on laptops, turns ICE into a powerful frontend sales tool. Even without it being loaded on computers, customers can access online, virtual renderings showing how DIRTT walls might fit into their space.

While the distributed production is important, using ICE as a common denominator allows DIRTT plants to run as one integrated operation with production of specific components spread among them. Multiple sourcing for a single order helps the company meet tight customer timelines.

The program allows for seamless and

immediate updating and integration of any changes. All this results in a very low deficiency rate, which DIRTT now places at 0.5%, termed by Jenkins as “extremely low” for the industry. That means reduced waste and an enhanced commitment to sustainability.

The company operates within 130,000 square feet at two Calgary locations, an area barely one seventh of SMED’s space.

Apart from small 1,350 to 1,500 square-foot showrooms in New York, Chicago and Calgary, DIRTT does not have its own sales space, relying instead on 109 distribution partners (including large furniture sellers) in major North American centres.

Though not complacent, DIRTT sees itself enjoying a measure of insulation from offshore competition. That’s partly because it produces a customized rather than commoditized product. Furthermore, through distributed manufacturing, ICE delivers turnaround simply unattainable from overseas sources.

Environmental commitment extends to using only water-soluble resins and UV-curing for panels. The Calgary plant has the largest solar array and largest windmill of any commercial operation in the city. To transport product, DIRTT has developed a unique reusable, hydrate-plastic packaging called the “Cookie.” It not only protects shipments, it also permits loading a fifth more product onto trucks.

DIRTT insists that sustainability complement – not hinder – economic performance.

“You can get people all misty-eyed about being green,” concedes Jenkins, “but at the end of the day the green that really matters is money. We have a product that is sustainable but if you can’t compete against traditional products in terms of price and design quality, then it doesn’t matter.”

DIRTT’s systems proved competi-

tive for British Columbia Ferries Inc. (BCFI), which recently moved into new corporate headquarters in Victoria. BCFI corporate services manager Fran Hobbis, project manger for the relocation, lauds the company’s moveable wall system.

“We’re a very dynamic, change-oriented organization and wanted the flexibility of the moveable walls. We have a fairly high churn rate in terms of building more offices and bringing in more people. We wanted to do that cost-effectively and embrace LEED (Leadership in Energy and Environmental Design) principles. This is a huge way to act in an environmentally responsible way.”

DIRTT’s sustainability commitment extends to Spider Agile Technology, a firm based in Kelowna, BC and acquired in 2008. Its modular electric-power products can be integrated into the walls.

From a start-up staff of 12, DIRTT and its subsidiaries now employ 550, and the company’s success has led to awards.

For instance, within a year of start-up, it received an Excellence in Partnership Award for Green Industry Contractors from the US Government. And the Ernest C. Manning Awards Foundation recognized Geoff Gosling, a primary inventor of the DIRTT wall system.

Success has caught the eye of competitors too and spurred DIRTT to stay ahead. With that in mind, the product development team recently expanded by 20%. Within DIRTT and its subsidiaries, more than 10% of employees are engaged in R&D and software development.

Revenues have grown from $20 million in 2006 to more than $100 million, although the pace of sales increases did slip a bit this year. That’s not entirely surprising considering much construction under way when the recession struck in 2008 was only completed (including inside walls) in 2009 – to be followed by construction pullbacks in 2010.

With an order backlog triple that of 2009, Jenkins confidently predicts significant growth for 2011 and 2012.

He traces that projected growth to “people recognizing the power of sustainable design, modularity and that bad times, if anything, have probably refocused the importance of flexibility in the workplace.”

The recession, it appears, has not driven DIRTT up the wall.

Nordahl Flakstad is an Edmontonbased freelance writer. Contact him at nordahl@flakstad.edmonton.ab.ca.

Comments? E-mail joe.terrett@plant. rogers.com.

Canadian PLANT WEST 7

Management

>> Exporting

Winning the export game AFS drives cng engine controlLer sales in India

By Robert Robertson

T

here are 7,593 miles (as the crow flies) or 6,598 nautical miles between Calgary and Mumbai, India, but the world is a much smaller place for Jim Perry.

The president and CEO of Alternative Fuel Systems Inc. (AFS) knows the export game. The company is achieving sales success, especially in India and other countries, catering to a promising niche market for its electronic components and software designed for vehicle engines that run on compressed natural gas (CNG), It made these inroads by investing in research and development, seeking out the most promising markets and establishing global partnerships to “stay close to the ground,” while streamlining logistics and using technology to enhance productivity and improve customer service.

Based in Calgary, AFS designs, develops and produces core components for the international automotive sector, specializing in the alternative fuel marketplace (primarily CNG-dedicated vehicles). The company supplies electronic engine management controllers, natural gas handling components and associated software to manufacturers of new vehicles and stationary engines, as well as to aftermarket fleet conversion specialists.

AFS and Indian partner Advantek Fuel Systems Pvt. Ltd., a manufacturer of fuel conversion kits and pollution control in New Delhi, have two major customers located close to Mumbai: Tata Motors and Mahindra & Mahindra Ltd. Tata Motors, owner of the Jaguar and Land Rover lines, is the world’s fifth largest medium and heavy vehicle manufacturer with sales of US$20.2 billion. Mahindra & Mahindra is a US$6.7 billion conglomerate with about $1 billion in annual vehicle sales.

AFS first developed an engine control system for Tata Motors’ CNG-powered ACE small truck, used for inter-city deliveries. The truck has a 1,322-pound load capacity and features a two-cylinder, 700-cc engine.

Cities in the world’s most populated democracy have restricted the use of diesel fuel. According to December 2009 figures released by the International Natural Gas Vehicle Association, there are more than 900,000 natural gas vehicles and 560 re-fuelling stations in India, so working with Tata Motors and Mahindra & Mahindra was a perfect fit for AFS. Engine controller shipments to the two companies over the past three years have now exceeded 20,000 units, and Perry notes governments in India and Thailand, which are demanding the use of CNG-only vehicles in large cities, have aided sales.

“This sales level is a major milestone for AFS. We have stated that one of our main objectives is to grow the OEM electronics side of our business,” says Perry.

“By shipping our 20,000th engine controller to India, we have demonstrated significant progress toward that goal. As well, shipments to customers in other countries for both OEM and aftermarket applications have shown good growth.”

Late last year, Tata Motors selected AFS to participate in its CNG-fuelled version of the Xenon pickup truck and there are other global projects on the go nearing production. Perry says a broader customer base will drive increased sales and growth, as current customers introduce additional CNG models into their fleets.

AFS has been around in various incarnations since the mid 1980s. Its original focus was diesel dual-fuel (running a diesel engine using equal amounts of diesel fuel and natural gas). But the company decided the technology wasn’t going to be commercially successful, so it began producing natural gas pressure regulators and sold them

8 Canadian PLANT WEST

Controllers destined for Mahindra vehicles in India.

mostly in Europe. At the time, it also made electronic control systems mainly for sale in the Middle East.

“Two or three years ago, we could see things moving away from mechanical equipment and going completely electronic,” says Perry. “The only way you can really attain good emissions is to control everything.”

Realizing AFS’s strength was in CNG, the company looked at where CNG vehicles were being built by OEMs, and as it turns out, most are made in India and Asia.

Passionate about vehicles Pre-AFS, Perry (who graduated in 1970 from the University of British Columbia in mining and engineering) ran a small fuel-cell company in Calgary called Global Thermoelectric. The chairman of AFS invited him to join the company’s board of directors in 2002. In November 2003, Perry was asked to take over as AFS president and CEO. “All of our people are passionate automotive nuts. We like vehicles and we’re car guys,” says Perry.

“AFS is a great place to work if you’re a car guy and live in Alberta.”

As a company, AFS wasn’t immune from the effects of the economic downturn on North America’s automotive industry, but the company made adjustments that kept it moving in the right direction, and its efforts are paying off.

Sales of engine management systems were up in the first quarter of 2010 by more than five times compared to the same period in 2009. And he says sales of fuel injectors almost tripled in the first quarter compared to those recorded in the same period last year.

Perry believes in staying close to the ground because it leads to global market share. He says the real challenge for any exporter is convincing customers you can handle their business. “In India and other countries, Canada has a very good reputation; however, just because they like you doesn’t mean they will do business with you. You’re not going to go anywhere without a solid partner in the country. And in India, we’re really lucky to have found our partner [Advantek Fuel Systems]. When Tata Motors began building its dedicated CNG vehicle [ACE], the AFS team made a number of trips to India and talked to all sorts of people, as did Advantek Fuel Systems.

“We spent a lot of time and effort to get in on that project, which has turned out to be very good for us,” says Perry. “And you get your return by ultimately being

on production vehicles.”

Despite the 12-hour time difference, AFS keeps close tabs on its customers weekly via the internet.

“You have to take time to know customers, so they can see what you can do. It’s also about relationships,” says Perry. “I have taken many of our customers to see Banff, as they love it there. Being located in Calgary does have its advantages for us.”

The internet is giving AFS an edge in more ways than one. The company continually revises the software that goes into the CNG-production vehicles. Instead of shipping CDs by courier, which was an onerous task only a few short years ago, the Calgary office can stay in almost real-time contact with customers. “This allows us to do some things that we couldn’t before,” PHOTO: AFS says Perry. “We can come up with a new version of software, test it here for a day or two, fire it over to India and they can flash it right into their vehicles.”

Steve Rodgers, president of the Automotive Parts Manufacturers’ Association (APMA), says many North American automotive parts suppliers, like AFS, are expanding their global horizons, but it’s important for them to understand a country’s economic nuances.

“While they may not want to be a global parts supplier, they’re still looking for global opportunities,” he says.

“The North American [automotive] market isn’t growing a lot. It will take three or four years to get back to where we were previously. Eastern Europe and Asia, however, are growing quite significantly.”

He says suppliers have to know each particular regional economic marketplace, as they really do vary. In a lot of situations, a partner can help a supplier understand local business requirements. To support global platforms, OEMs are also looking for suppliers who can do engineering in one location and potentially manufacture in two or three locations.

“This creates even further incentive to try and make sure you have some international manufacturing capability,” says Rodgers. “One has to have a bigger global footprint, so there will be continuing investments in some of these emerging opportunity countries.”

Looking to the future, Perry says it will be important for AFS to remain engaged in potential new markets and increase its global reach, especially in Southeast Asia. “To grow our business, we’ll add programs with current customers, as they know our capabilities and already have CNG vehicles in production,” he says. “In terms of adding new customers, our focus will be on the Indian and South Asian markets.”

Across Canada, the adoption and use of CNG vehicles is a ‘chicken and egg’ dilemma – few filling stations, few CNG vehicles. As of March in Alberta, for example, there were almost 3 million registered motor vehicles.

At the same time, only 77 were registered as CNG vehicles (and five of those were at AFS). Once CNG vehicles become more commonplace in Canada, AFS will also succeed in its own backyard.

Rob Robertson is a freelance business writer and editor based in Burlington, Ont. E-mail three_r_media@ cogeco.ca.

Comments? E-mail joe.terrett@plant.rogers.com.

November/December 2010

Machinery << Innovations Ray Roussy and his sonic drill in action.

Drilling at sonic

SPEED

BC INNOVATOR MARKETS GROUNDBREAKING TECHNOLOGY

BY NOELLE DICKEY, FEATURES EDITOR

O

ver the past century many have attempted to develop sonic drilling technology, but either failed or gave up; however, one BC innovator has finally prevailed.

It may have taken him three decades of trial and error while plugging away in his own backyard – with minimal financing – but Ray Roussy, co-owner of Surrey, BCbased Sonic Drilling Ltd., saw the market potential of using vibration to drill holes.

A traditional drill rig rotates a pipe, pushing it into the ground using drilling mud (clay and water) to keep the hole open. When the drill pipe is removed, there’s a risk the newly drilled hole will collapse before a casing is inserted.

Roussy’s technology is based on the same principle, but the sonic drill vibrates at a high frequency, which speeds up the process considerably.

“We’re also able to use the drill pipe as a casing. This open-ended piece of pipe vibrates into the ground to form the hole, and protects it from collapse,” he says.

As a result, geothermal installations (for example) are faster and easier, but the patented technology also allows continuous core samples to be taken for accurate geological site profiles. They’re used for the design of geothermal loop fields and environmental investigations, both markets Roussy and his business partner Tom Savage are pursuing through Sonic Drilling, US-based Sonic Drill Corp. and their manufacturing unit Sonic Drill Systems in Chilliwack, BC. Roussy credits George Constantinesco, a Romanian intellectual who immigrated

PHOTO: SONIC DRILL

company Sonic Drilling Ltd. Once deemed ready for the market, commercializing the technology began, which was another long process.

Tough terrain Getting business locally wasn’t a problem, though. The sonic drill is five times faster than conventional rigs or drilling methods, boring through tough terrain that will thwart the other drillers. The partners demonstrated the technology to some of the larger engineering outfits involved in environmental investigation, and soon the phone was ringing.

In the geothermal world, a lot of drilling jobs get held up when conventional drilling runs into some ground that won’t yield.

“That’s when people find out we exist,” says Roussy, whose company does a lot of “rescue” work on stalled projects.

Geothermal projects run on tight schedules. Installing a geothermal system at a building site has to be done fast.

“The property owners aren’t looking for the lowest price, but rather a company that will get the job done quickly and efficiently, because time is money on a big scale,” says Roussy.

The company has a pretty good handle on the sonic drilling market, which is generating close to $10 million a year. To pro-

to England in 1910, with the idea of using vibrations to drill holes (see www. sonicdrilling.com for a history of sonic drilling).

Development continued 20 years later

by Romanian engineer Ion Basgan who received patents in Romania and the US for his technique, and more interest was shown through the 1940s and 1950s when American inventor Albert Bodine continued development work, mostly focused on large, pile driving machines. He sold his equipment in the 1970s to Hawker Siddeley, a British aircraft manufacturer with offices in Canada, where the young mechanical engineer Roussy was part of a team hired to further develop the pile driver technology. Hawker Siddeley discontinued its efforts in the early 1980s, and Roussy left to pursue his own ideas on how sonic drill heads could be adapted for use in different applications.

Working out of his home office and a workshop in his backyard, and having no financing to speak of, his only option was to build a machine himself.

In the beginning, Roussy’s priority was to make the machine reliable, which took what he describes as “an eternity” to achieve.

“In the early days we would see the machine fail within a few minutes [of running]. So I would redesign a part and put it back into operation, then another part would fail.”

Roussy says the machine had to operate 24 hours a day for five years before they felt comfortable selling it to someone else.

Development and testing took place in ‘real world’ settings under the contracting

tect this booming trade, Sonic Drill does not license or sell its equipment locally.

But it does demonstrate the technology worldwide, and the machinery is sold or the technology is licensed to companies abroad for exclusive use in their markets.

The machinery comes in various sizes, costing between $150,000 and $700,000.

Sonic Drill has also designed its own drill piping and accessories.

When a drill pipe vibrates at a high frequency, the vibration decreases as more drill piping is added. Sonic Drill’s unique tooling includes drill pipes, rods, bits and other accessories that operate at a high frequency and transmit vibrations in really deep holes.

The technology also has a green benefit: it uses water instead of compressed air, and H2O replaces drill mud.

As the business takes off, Roussy is getting innovation nods. In September, he was presented with a prestigious Manning Innovation Award and a $10,000 prize from the Ernest C. Manning Awards Foundation. The award recognizes Canadians who have “the imagination to innovate and the stamina to succeed.”

He has certainly demonstrated perseverance over the decades it took to bring an innovation to market that is literally and figuratively groundbreaking.

Comments? E-mail joe.terrett@plant. rogers.com.

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Canadian PLANT WEST 9

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12/9/09 11:24:28 AM

Departments

>> Product Showcase

>> Plantware check your plant’s pulse The Freedom eWARE suite from MAG America’s e-tekx software group. It covers performance, use and availability feedback from any industrial asset on the plant floor.

The modular and scalable software package for data acquisition, condition monitoring, energy monitoring and cell control generates reports and analytics for maintenance, process optimization and OEE. It’s MTConnect-compliant and interacts with smart phones, tablet PCs and similar mobile devices, displaying machinery status, productivity data and machinery analytics for various systems on a plant network.

“Target independent” eWARE collects data from a variety of plant floor assets – without modifying to ladder logic or part programming – and transforms it into actionable information.

It has five modules – eLOG, eVIEW, eMONITOR, eENERGY and eCELL – plus a control-resident eCONNECT interface for each machine that uses a PC front-end control. For non-PC-based CNCs, PLCs and manual machines, eCONNECT runs on a DIN-rail-mounted PC with discrete I/O connections to specific machine electrics.

MAG, a global machine tools and systems company, is based in Mississauga, Ont. www.mag-ias.com

Monitor HF acid online in real time Invensys Operations Management has simplified the online monitoring of hydrofluoric (HF) acid.

The Plano, Tex.-based technology systems provider says its ACA.HF advanced alkylation, non-spectroscopic acid catalyst measurement replaces conventional manual sampling and FTNIR analysis. It monitors HF levels in real time by analyzing differential responses from online sensors.

Hydrofluoric acid is a common catalyst used in petroleum processing, and accurate analysis of how much HF is re-circulating within the process contributes significantly to maximizing the yield rate of crude stock.

Invensys says ACA.HF is half the cost of an FTNIR system and requires minimal maintenance because its core components are built from rugged materials traditionally used in industrial HF applications. Monitoring models run inside new Foxboro PAC System controllers and advanced analytical software reads the response spectrum that is directly analogous to what is produced HF acid monitoring made simpler. by a traditional FTNIR. This also minimizes the potential for corrosion, and eliminates any potential sample exposure for plant and laboratory personnel.

Based on established industry methods, ACA.HF’s estimated mean time between failures (MBTF) the solution exceeds 29 years. Invensys notes there were no maintenance costs in the first year of implementation at the test refinery.

Invensys Operations Management is a division of Invensys, a London, UK-based provider of automation and information technology. www.xmr3.com

Standup forklift improves operator comfort

Models 4150 and 4250 counterbalanced lift trucks.

Tough dock environments and uneven floors are easier for operators to handle with Raymond Corp.’s 4150 and 4250 stand-up, counterbalanced lift trucks.

The Green, NY-based forklift manufacturer says the 3,000- and 3,500-lb. vehicles offer greater visibility and manoeuvrability thanks to agile steering, a shorter head length, dual steer tires and ComfortStance suspension.

The suspension, standard on Model 4250 and optional on Model 4150, adapts automatically to each operator’s weight and features only nine parts for simple maintenance.

The three-wheel trucks perform right-angle stacking manoeuvres in less total area with a dual-steer design that allows one wheel to counter-rotate during turns, resulting in a shorter turn radius. This reduces tire loading and steering friction. And short battery compartments reduce head length, optimizing manoeuvrability in crowded docks and smaller places.

An angled front cover provides better visibility of forks as they engage loads for more accurate handling and stacking.

Powered by Raymond’s ACR System, Models 4150 and Model 4250 maintain high, energy-efficient performance throughout the battery cycle. www.raymondcorp.com

>> Events Lean Maintenance in Challenging Times New Standard Institute Dec. 16-17, Orlando, Fla. The session features consultant Joel D. Levitt’s latest book. A lean company can be flexible, react fast to the marketplace, lower prices and stay profitable. Visit www. newstandardinstitute.com.

PLC Troubleshooting I CD Industrial Group Jan. 24-25, Kamloops, BC Hands-on program focusing on PLC5 and SLC500, featuring simulations, lab activities with hardware components and basic PLC programming activities. Visit www.carldyke. com.

Decor Cabinet Co. Plant Tour Innovation Insights/CME Jan. 25, Morden, Man. An Innovations Insights plant tour at Decor Cabinet Co. where you will learn about

10 Canadian PLANT WEST

The WM40-96 smart power analyzer.

Super-accurate power analysis Carlo Gavazzi Inc.’s WM40-96 smart modular power analyzer measures electrical variables such as current, voltage, power, energy and harmonics in each application where parameters analysis, control, data stamping and retransmission must be very accurate.

The Mississauga, Ont. supplier of automation components says the basic, streamlined modular unit and plug-in module save space in the backside of control doors and switchgears.

It comes with an advanced keypad and innovative display that includes five rows of measurements and a bar-graph power demand indicator. A front optical communication port is also available for quick access to measurements and easy programming. www.gavazzionline.com

manufacturing semi-custom cabinets in a small environment. Presented by Innovation Insights through Canadian Manufacturers & Exporters (CME). Visit www.tvp-ii.org.

New Flyer Plant Tour Innovation Insights/CME March 8, Winnipeg An Innovations Insights plant tour at New Flyer where you will learn about 5S, point of use inventory and continuous improvement.

Presented by Innovation Insights through Canadian Manufacturers & Exporters (CME).

Visit www.tvp-ii.org.

Western Manufacturing Technology Show SME June 14-16, Edmonton The Society of Manufacturing Engineers (SME) present the Western Manufacturing Technology Show (WMTS), a showcase for manufacturers of products ranging from machine tools, welding equipment, design engineering and plant maintenance to process control and automation. Visit www.wmts.ca.

November/December 2010

Postscript << Departments

Optimism in grows in BC’s forest industry

By Roslyn Kunin

I

t used to be so easy. All you had to do was look at housing start numbers for the US and that determined the health of the forest industry in BC and, to a large extent, the state of the whole provincial economy. This was when the woods sector had one dominant market, US homebuilders, and one prominent product, dimension lumber.

Now the only thing that seems to be working for the forest industry is Murphy’s famous law, if anything can go wrong, it will. The US housing market is down and shows no signs of getting up.

The Canadian dollar is strong versus the US buck. The mountain pine beetle has devastated huge swathes of forests and summer fires laid waste to even more timber land. Nonetheless, wood sector leaders from the interior of Northern BC are optimistic – even enthusiastic – because of the many positive changes taking place.

One big change is customers. They’re not just the US any more. When I tried to contact, Ken Shields, CEO of Conifex, he could not get right back to me because he was out courting new customers – in Russia and China. And David Lehane, vice-president at West Fraser Mills, notes that his firm has long relied on the US market and, to a lesser extent, Japan.

Now he sees strong growth in China.

Customer diversification Finding new customers will help the BC woods companies get through the slow times in the US while leaving BC and Canada in a much stronger bargaining position when the US market turns up.

But even bigger than the diversification of customers is the changing mix of products. Older companies such as West Fraser Mills are still concentrating on dimension lumber and other building products, but up and comers like Conifex are finding newer and greener ways to get value out of the forest.

Janine North, CEO of the Northern Development Initiative Trust, sees the forests moving away from producing building products for export to producing energy and sources of energy, much of which can be put to good use in BC. This goes beyond the use of hog fuel to generate heat in traditional wood processing operations. She sees pellets, hog fuel and other forms of biomass becoming the feedstock to generate both heat and power at a community level using new simple, efficient and green technology. Easyto-operate is important because North foresees many small, isolated towns and villages short of highly skilled labour moving away from diesel generated power to local forest-based biomass to provide the community with heat and electricity.

Organizations from BC Hydro to First Nation start-ups and many companies in between are looking at how to use technology to get much more value than just

www.plant.ca Canadian PLANT WEST 11

Finding new customers will help the BC woods “companies get through the slow times in the US... logs or lumber out of BC’s forests and advance both economically and environmentally at the same time.

To continue moving ahead, the forest industry in BC needs capital and labour.

Many firms are investing in today’s technology to be efficient and competitive in old and new and markets, but upgrading is pricey. The latest technology update at West Fraser Mills cost $125 million.

On the labour side, employers wonder

”

whether growth in the sector will be limited by a lack of suitable workers. They note the downward trend in the numbers of young workers entering training programs and how close many current employees are to retirement age. Instead of talking about layoffs and downsizing, they list recalls and upgrades that will need workers with up-to-date skills.

Government plays an ongoing role in BC’s forest industry where so much of

the resource is on Crown land. Lehane says a major change of attitude is needed. Forests should not be seen as a source of limitless resources there for the gathering, but rather as a garden that we must cultivate. Government’s role will be to support this new approach.

Roslyn Kunin is the director of the Canada West Foundation’s BC office.

E-mail kunin@cwf.ca.

Comments? E-mail joe.terrett@plant. rogers.com.

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