Local Timber, Taller Profits
Wood products manufacturer weathers the economy by taking control, from the tree to the customer.
BY JENNY ELDREDGE
Stately stands of trees in Minnesota's forests appear, at first glance, to symbolize permanence and rigidity. But people who manage woodlands understand the progressive planning, variation and short-term evolutions required to maintain a forest's health. Sylva Corporation of
Princeton follows that model.
With family roots running deep in the wood industry, Sylva's owners, Larry and Yvonne Doose, focus on building upon the company's proven success in producing woodchip ground covering while simultaneously preparing for growth as a supplier of biomass fuel for sustainable energy
generation.
Yvonne's family was involved with the sawmill and logging industry, so Larry says he "married into it" in 1981. Having previously owned a sawmill logging operation in Onamia, the husband and wife team started Sylva Corporation in 1997. In Latin, the word "sylva" means
"forest."
In the company's first 10 years, Sylva made wood chips using 100 percent leftover or recycled wood.
"If you look at any manufacturer of wood products, such as cabinets, paper, lumber, et cetera, they all develop one or more byproducts from the process of making their primary product," Larry Doose says. "Another source of raw material in the past has been recycled wood,
which is a combination of used pallets and crating, lumber trimmings from truss plants and so on."
In the past, Doose says, they would park 40-yard dumpsters outside local manufacturing companies. The manufacturers would place waste wood inside the Sylva dumpsters instead of in the garbage. That process not only supplied Sylva with its input materials, it also kept reusable
wood out of landfills.
Then, along with the economy, everything changed.
"With the downturn of the housing market in the last three years, more companies that were producing byproducts were either curtailing their output or shutting down," Doose says. "The waste product was not available."
So, while Sylva continued to produce wood chips, its source of fiber changed. It made a shift to use only 10 percent byproduct or recycled wood and 90 percent harvested timber. In the end, the new approach provided a huge advantage.
"We have almost total vertical integration, from the stump to the customer, in all phases," Doose says. "A lot of companies buy fiber and process it. But we manage it all the way from harvest to the end user."
The change also led to greater control of the company's position in the marketplace. "Since we started relying on harvesting timber for our production needs, our sales have tripled," he says. "Over the past two to four years, as other fiber supplies have been going away,
we have been able to transition and gain market share."
Local, Strategic Harvest
With a staff of 55 employees, Sylva harveststrees from forests within 60 miles of Princeton. The crews use machinery on site at the forests to cut, stack, haul and grind or chip the trees. The forest sites vary from private land to state and federal forests and wildlife
refuges.
"Every harvest is different, based on the landowner's needs," Doose says.
Primarily, owners want to thin their forests to remove trees of a certain age or size. Others want to change the land use -- for example, by converting forestland into pastureland.
The logging is executed using best management practices, Doose says. "We put our crews through continual training and are certified as master loggers through the Minnesota Logger Education Program."
He is sensitive to a public perception that logging is bad for the environment, recalling the spotted owl controversy of the late 1980s and early '90s that transformed the timber industry. "Through all that, the forest products industries that are left are good stewards of
the land," Doose says. "Tree harvesting is a good thing. It provides not only needed products and jobs, but it is also good for the health of forests."
Last summer, for example, Sylva started work with a team of foresters at the 31,000- acre Sherburne National Wildlife Refuge, near Princeton, to remove oak trees killed by oak wilt and to create firebreaks by removing dead trees that could fuel forest fires. The project will
be completed this fall.
End Uses
From the forest sites, Sylva trucks haul the ground or chipped material to the company's plant in Princeton, where it is dried from 45 percent moisture content down to 10 percent.
About 75 percent of the material is made into SylvaSafe decorative landscape mulches, SoftStep playground-safe mulch and other ground covers, including animal bedding used at farms. The mulches are shipped in bulk to retail garden centers, large landscape contractors and
wholesale companies that supply contractors, Doose says. Sylva products currently sell in Minnesota, North Dakota, South Dakota, Wisconsin and Iowa.
The other 25 percent -- or 40 truckloads a week -- of Sylva's wood material hits the road to Koda Energy in Shakopee. The plant is a partnership of the Shakopee Mdewakanton Sioux Community and Rahr Malting. There, Doose says, Koda Energy burns the wood to create high-pressure
steam to generate energy in the form of electricity and heat. The electricity is used to power the energy plant and the malting operation, with the excess sold to Xcel Energy. The process also generates thermal heat, which is used in the malting process at Rahr Malting.
"It is exciting to me because I like to venture into new markets and develop projects," Doose says. "On a broader view, it means creating economic cash flow right here in our state. Dollars spent on developing and then operating biomass used in this state stay here and
spin in our local economy -- as opposed to the dollars flowing out of this state for imported energy sources."
Colors, Consistency, Cost
A fleet of 14 company-owned trucks, together with those of some outside trucking vendors, keeps the company mobile and accessible to mulch customers and energy customers.
"What I really like about Sylva is its same-day delivery," says Mark Neubauer, who works out of Bachman's Cedar Acres location in Lakeville and serves as manager for hardscape lines at all Bachman's locations. "I can have 100 yards of mulch in the bin in the morning and
by noon it's gone. If I call Sylva at noon and say I need a load down here by 4 p.m., they'll find a way to do it."
With customers buying mulch only a few months of the year, timing is everything, Neubauer says.
"We need to turn product as quickly as possible," he says. "And Sylva helps us do that."
Neubauer started buying Sylva mulch products four years ago because he wasn't happy with the quality provided by a competitor. He was pleased -- and so were his customers -- with the quality control evident in Sylva's mulch. Neubauer says it is free of leaves, evergreen
needles and other debris. And his customers appreciate the uniform colors, consistency and cost of the mulch. Bachman's carries nine Sylva mulches, with Western Red Cedar being a reliable bestseller and, he says, "the best in town."
Bachman's also utilizes an OX BOX, a portable, 40-yard mulch bin provided by Sylva.
"They allow us to expand our offering without building up concrete bunkers," Neubauer says.
Internal Mechanisms
As Sylva Corporation continues to adapt and expand, it is turning to Enterprise Minnesota to help ensure the company's internal mechanisms keep up with its growth.
"We definitely have a strong need to go down the road of learning," Doose says. "We need to smooth out the process in the office. The information and paperwork flow have been a struggle."
Doose will be tapping into a new Enterprise Minnesota CEO Peer Council in St. Cloud and is embarking on GreenLeanSM Office training.
"The whole concept of what Enterprise Minnesota can do for our company is exciting," he says. "We want to do better and be more efficient managers because we are growing."
Biomass Future
The company's growth could come on several fronts. While Doose is vigilant about maintaining the quality and customer satisfaction of Sylva's mainstay, landscaping mulch -- using third-party labs to ensure the decorative wood materials are safe and durable -- he wants to do
more. In 2011, Sylva will evolve again, moving from selling mulch only in bulk to a new offering of bagged products. These will make it easier for the home gardener, who will need only to load a few bags of mulch into a car instead of shoveling mulch into the back of a truck.
Doose also is keeping the company poised to jump further into the biofuels market in the future, depending on trends in the energy market and the federal government's energy policies.
"There are opportunities coming in alternative energy," he says. "We have ongoing research and development to see how we can take dried wood fiber and process it to take it further."
In the meantime, Larry and Yvonne's four children may or may not follow the family footsteps into the wood products industry. So far, the kids want to be involved. And, Larry Doose says with a laugh, the youngest -- at age 6 -- has her sights set on being the boss one day.
To learn more about Sylva Corporation, visit
www.sylvacorp.com.
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