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Industrial band sawmill improves Latvian pallet maker's margins

Industrial band sawmill improves Latvian pallet maker's margins Latvian citizens’ access to Europe’s booming labour-market following EU accession has caused a brain drain from the Baltic country. Skilled woodworkers are leaving Latvia for other EU countries – such as Ireland – where they earn higher wages leading those that stay at home in a strong position to demand high rates. This has galvanized timber processing firms, forcing them to take a hard look at financial structures. Get it wrong and bankruptcy looms. Interestingly, the situation has opened up opportunities for women and their occupational discipline, less predisposition to boredom, and a 'focus' on job, represent a refreshing change for woodworking bosses.

Even so, entrepreneurs’ most significant response in laying down modern, labour-saving equipment has caused a mini-industrial revolution in Latvia’s burgeoning timber processing sector. Such new equipment requires fewer, now relatively highly paid, personnel.

Janis Sudrabs, owner of woodworking firm ‘Vasks’ is typical of this reaction, saying:

"Forty people work in my company, all from our village so it used to be quite important since there were no other enterprises. However, many young people went to work in the West".

From 1997 ‘Vasks’ has produced pallet wood for the European market and four years ago he installed a six-head Wood-Mizer MultiHead saw to cope with demand.

"The productivity increased at once but there were still too many intermediate manual operations, expensive with the new Latvian labour costs".

This led him to take a further step, investing in a LT300 industrial scale band sawmill. It brought a built-in material handling system with all operations from log loading, through cutting, board removal and material sorting on a cross transfer table carried out by one operator from a remote control station.

In another example, Gundars Vilks, owner of ‘Silviko’, has produced timber building materials for Japan during the last decade.

"Currently, it’s quite unprofitable to simply rush on cutting as many cubic metres as possible.

"Think margin, don’t think volume is my motto now – I cut a smaller quantity of high quality product from each log and only a narrow band sawmill can do this easily", advises Gundars Vilks.

Japanese customers place great importance on product quality and delivery. With this in mind ‘Silviko’ has geared itself to a single container of ready dried boards every single day.

"Before, I ran five narrow band sawmills made by local manufacturers and each requiring four operators. Obviously, this became unprofitable in the current labour market so I replaced all five mills with one LT300 which I tested rigorously and successfully.

"This led me to acquire a second LT300 and consequently replace 20 personnel with just four, on two band sawmills in two shifts. Productivity grew", notes Gundars Vilks. Like most Latvian wood processors he prefers to talk about productivity per man rather than overall productivity…

"Sawmilling in my facility is never less than 10m3 of logs per person in one shift", Gundars Vilks concludes.
Wood-Mizer certainly notes considerable growth in LT300 orders from countries like Latvia, Lithuania, Poland, the
Czech Republic and Bulgaria since their EU accession.

"These countries which joined recently do indeed face a scarcity of experienced personnel", observes Vilmars Jansons, Wood-Mizer representative in Latvia "…and the benefits offered by the LT300 industrial scale band sawmill fit the gap.

"But there is another explanation for LT300 popularity in these states: Wood-Mizer equipment is CE certified and corresponds to European standards of health & safety, now is crucial to employers in the new EU", he adds.

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