With the world's third-largest forest area (about 350 million hectares), it's not surprising that the forestry/sawmill industry is a significant contributing factor to the Canadian economy.
Export markets are in demand. Sales to export markets, notably the United States and China, are likely to persist in contributing the majority of industry revenue.
The sawmill & wood production in Canada comprises lumber, boards, and various other wood products where the revenue increase is directly linked to residential and nonresidential building market demand. Domestic building markets have a powerful and pivotal stimulus on industrial production.
Sawmilling is a significant industry in Canada. In 2021, the sawmill market size of Canada reached $19bn, showing a relatively rock-hard performance.
To be a market leader in this industry, you'll need to learn how to manage your sawmill business efficiently with modern techniques. This detailed roadmap will give you a head start.
Grow your business
Sawmilling can be a lucrative venture if the owner has a strategy in place and can adhere to it long enough to consolidate the operation, enhance productivity, and make a good profit.
This, like other enterprises, will require patience, sheer dedication, logical financial and managerial decisions.
The worth of your tools
One of the most crucial things to invest in is your tools. There are various high-quality tools & machinery accessible when it comes to sawmills that require low maintenance
Sawmills are expensive. A brand new, first-class mill can cost between $20,000 and $50,000, while a refurbished sawmill might cost $15,000 and $20,000. While it might be an expensive purchase, quality equipment will last longer, and directly impact your production capabilities.
When it comes to buying and selling logs, there are very few prices that are fixed in stone, so sharpen your vision to scan for excellence and only acquire raw materials that exceed the quality standard, are comparatively cheap, and are secured from an eco-friendly, sustainable source.
Find dependable help and compensate them well enough to stay with the business.
The mill only makes money while it is processing wood, so you'll soon find that you're spending a lot of your time buying logs, chatting to clients, servicing machinery, sorting timber, and polishing blades. Having a strong team beside you will ensure that you can focus on matters that need your undivded attention.
Be unique in your value proposition
Many businesses need to reinvent themselves to suit shifting customer expectations. As these demands grow and change, businesses need to reinvent themselves to remain relevant and profitable.
Concentrate on differentiating your sawmill business. A properly defined unique selling proposition can be based on efficient customer service and a wider array of services such as utilizing waste wood in creative ways.
Examine what your rivals are up to. See if their sales are outpacing yours and, if so, what's causing it.
According to the Supply Chain Integration for Small Sawmills case study, small and medium-sized sawmill suppliers should make a strategic choice to integrate their supply chain with companies to deliver customer value based on delivery consistency, product superiority, market flexibility, and maintain competitive advantage.
Be the champion in inventory management
One of your goals should be to maintain a continuous flow of products. This principle also implies that, rather than being combined into huge orders, incremental orders can be released, executed, and managed. Daily or weekly production runs in breakdown cycles are the best approaches.
The collaboration between sawmill businesses with residential and nonresidential builders is essential to develop manual and automated information exchange systems like CAD/CAM. Forecast information regarding future projects is one example of this type of data.
Use real-time SAP, Genesis, or similar software to maintain the ins & outs of your orders. This one-time cost will help in the long term.
Base your decisions on market research
Canfor Corporation, West Fraser Timber Co. Ltd., Resolute Forest Products Inc., and Western Forest Products Inc. have the most significant market share in sawmills & wood production in the Canadian industry. Their plant locations are widely scattered across Canada, predominantly in the coniferous forest region.
Competing against large firms will be challenging, so it is essential to learn from them in order to analyse threats and opportunities. Being a small or medium-sized sawmill business is not a bad thing. You can tap into niche market segments if you do your homework.
Learn from industry facts
The majority of Canadian lumber is exported; only less than 40% is being consumed in different Canadian cities.
Canada's timber and sawmill businesses have sought to cultivate innovative, high-tech products by exploring wood's microscopic, nano qualities and inventing various applications for them
In the year 2020 only, the sawmill and logging industry in British Columbia employed roughly 17,200 people
In Ontario, three new trees are planted for every tree that is harvested.
Set-up an Appealing Marketing Strategy
A strong database and connection with equipment dealers, loggers, and consumers throughout the supply chain must be consistently monitored
Advertise your sawmill business specialties and offerings in highly circulated local newspapers, magazines, social media channels and rank them through search engine marketing (SEM)
Fund your business growth
The country is full of opportunities for seed funding or continuous feeding from public and private sectors. You can avail Govt supported projects or contact investment experts, depending on your need to expand, to buy the supplies, to hire more workforce, to cover operational expenses for your own sawmill business.
Utilize the below key platforms to fund your business:
Exiting your business: some considerations
You're probably more concerned with developing your sawmill business. However, failing to plan an exit from your business can lead to a difficult succession process and a loss of value.
Market value exists in successful companies. Most companies may be sold for a profit with enough planning, allowing entrepreneurs to move on to the next venture.
The initial planning stage comprises putting together a team of experts such as an investment banker, an attorney, or a valuation specialist who can set the value of your long hardworking years and business assets. Researching how to value your business pragmatically can be useful.
The second step is to connect with possible buyers and present the value options. Be steady in this process while negotiating and close the deal at the maximum price that best fits your next steps.