SUNBIZ

Tropik Embarks On Big $22m Upgrade Works

Tropik Wood Industries Limited (Tropik) our largest saw miller, is launching a major upgrade. Four years ago, a decision was made by Tropik that major capital upgrades of their sawmill
12 Dec 2015 10:49
Tropik Embarks On Big $22m Upgrade Works

Tropik Wood Industries Limited (Tropik) our largest saw miller, is launching a major upgrade.

Four years ago, a decision was made by Tropik that major capital upgrades of their sawmill line needed to be carried.

Executive chairman, Faiz Khan, said by the end of the past year, Tropik was in a financial position to undertake this upgrade.

This was when in-depth investigations commenced into the best possible solution.

A number of options were explored before a decision was made to go ahead with the $22 million mill upgrade.

Mr Khan confirmed factory operations ceased three weeks ago.

This was to commence the dismantling of the old plant and machinery, as well as undertake important civil works for the heavier machines to be installed.

 

Background

Tropik’s fundamental strength lies in its parent company, Fiji Pine Ltd’s resource base.

Fiji Pine is the largest pine resource holder in Fiji with around 80,000 hectares of land.

Tropik also gains significant advantages for being largely Government owned; in a successful partnership with the landowners.

 

Sawmill history

Tropik’s business commenced in 1987 predominantly as a timber producer.

Wood chip residue from sawmill operations was supposed to be a by-product. However, over the year’s, wood chip exports took prominence over timber production for a number of reasons.

One of the reasons was that wood chipping is relatively a much easier process than timber production.

The other reason is that the sawmill installed in 1987 was a second-hand sawmill that focussed on volume rather than recovery.

Tropik’s sawmill recovers around 28 per cent timber from logs; whilst current good industry practice requires minimum of 50 per cent recovery of timber from logs.

 

Way forward with

the upgrade

Mr Khan said: “It was apparent to us four years ago that we could not continue with such poor recovery of timber from logs.

“It takes a very long time of 25-30 years for logs to mature for timber. To wait for that long and not be able to able to fully recover the volume of timber as we should is very poor business.

“We explored a number of options of bringing in refurbished machinery from Canada or New Zealand that would save initial capital cost.

“We also explored installing brand new machinery from famous Vislanda sawmill machinery manufacturers in Sweden.

“After our due diligence we settled for brand new Vislanda machinery. We also settled for brand new kiln by Windsor, New Zealand.

“Brand new top of the line machinery will give us greater certainty of productivity over the next 15 years.”

Mr Khan said the Vislanda equipment they have selected is anticipated to give them both greater recovery (at least 50 per cent) and greater output capacity.

The hi-tech machinery Vislanda provides will scan each and every log and choose cutting patterns to optimise recovery.

 

 

The process

Currently there are 19 by 40 foot containers on water from Sweden scheduled to arrive in Fiji before Christmas, Mr Khan said.

There are other consignments of steel, tools, motors and gearboxes coming from New Zealand.

The installation and commissioning engineers from Sweden arrive into Fiji in the second week of January.

Mr Khan said a number of site supervisors from Skookum, New Zealand are already here but the numbers will ramp up in January.

“Skookum is tasked with a number of roles. They are our process engineers tasked to see that the integration risks of civil, mechanical and electrical works are mitigated,” he said.

“They also provided peer review on Vislanda’s recommendations and made a number of collaborative improvements with Vislanda.”

 

Some risks

Mr Khan said the greatest risk on the project is the risk of integration of new machines on old building location.

“The sawmill line is linked to so many other parts of storage of logs, in-feed of logs, green chain,” he said.

“Whilst relocation to a greenfield site would be idealistic, the costs of moving all other linkages would make the project commercially unviable.

“Having identified the risks we have to do the best we can to mitigate them.

“We also have to ensure that the different contractors engaged by Tropik that have their distinct roles on the project coordinate effectively and in a timely manner with each other.”

 

 

The timing

The upgrade process requires practical demolition and rebuild of the entire sawmill. The process will span for around five months.

Mr Khan said because the months of November to April are generally slow months for operations in Viti Levu, their upgrades are planned between November to April.

“We had to also meticulously plan the timing of order of machines and delivery from various parts of the world to arrive and coincide with our lull period during when we are carrying out these upgrades,” he said.

“Tropik’s procurement department has worked tirelessly to mitigate risks of coordinating timely supply of equipment with manpower.”

 

 

What the upgrade means?

Mr Khan said at present the Fijian economy is importing a lot of timber. This is a drain on important foreign exchange.

“By increasing our timber output we will support the Fijian economy’s building boom and save important foreign reserves,” he said.

“Most importantly, we are securing the long term future of our company, and our key partners:- our landowners and our workers.

“It is important that we upgrade our aging machinery that was neglected in the past due to lack of cash flow and neglect.

“Once all our upgrades are completed Tropik and Fiji Pine will provide significantly higher returns than what we are already giving to our landowners.”

The upgrades will also provide our workforce opportunities to up-skill themselves in building and operating state of the art machinery.

“You can sense great enthusiasm, pride and energy in everyone’s body languages. Around half of our workforce is involved in the upgrade process. They are a great team,” Mr Khan said.

“The upgrades auger well for the long term future of our landowners and our workers.”

 

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