Fiber Supply

The Price “Adjustment” Post…

/ caflynn / Leave a comment

Happy New Year to all WindsorONE Customers and Strategic Partners!

Your continued commitment to purchase and support American manufactured products is appreciated by Windsor Mill; a second generation family owned and operated business, founded in 1972, with manufacturing plants in California and Virginia.

The purpose of this post is to announce a price increase on WindsorONE and WindsorONE+ Protected Trim Boards, Specialty Boards (including CA Sidings), and Moldings.

The 4% increase on FOB Mill pricing is the direct result of increasing log prices and business operating costs, including ocean freight, inland freight, paint, glue, and another year of 15% health care cost increases. (Price increase on moldings expected to be slightly higher)

The price adjustment is smaller than expected because of long-term log supply agreements.  Our vertically integrated strategy continues to give us advantages in the marketplace, specifically as they relate to procuring a consistent supply of a consistent quality raw material.

The last price increase on WindsorONE and WindsorONE+ Protected was April of 2010. We’re hoping that the 4% increase holds through 2013, however, we could see additional log price increases and other economic changes.

The price changes will take effect on all shipments leaving our California and Virginia manufacturing plants the week of February 4th, 2013.

We are working to create the new price lists that reflect the approximate 4% change; we will distribute them to you as soon as possible.

Your continued support is more than appreciated… Build America!

 

Triple Bottom Line & The Patagonia

/ caflynn / 3 Comments

We continue to diligently work towards building upon our triple-bottom line culture and company.  This sustainable business model consists of three main components:

  1. Profit
  2. People
  3. Planet

While achieving any real Profits has been difficult for all of us over the last 3-5 years, Windsor Mill has certainly continued its commitment to People and Planet.  Two recent examples:

  • People: after the Chile quake, we invested significantly in helping to rebuild damaged and destroyed homes in local communities;
  • Planet: all WindsorONE fiber is either FSC-certified (over 70%), or from an FSC-controlled source.

We are clearly committed to environmentally sound supply-sourcing and manufacturing techniques. 

For some time now we have been aware of an international controversy regarding plans to dam rare river ecosystems in the Chilean Patagonia.  We are concerned that the Patagonia dam controversy would conflict with our environmental commitment and somehow be linked to our brand and products.

Therefore, as we buy raw material in Chile, we will endeavor to reduce material linked to the Patagonia dam controversy and to source more from MASISA, and other FSC-certified suppliers (& controlled sources).

For those interested in the sustainable Triple-Bottom-Line business model, this is a very simple image explaining the concept:

Arauco Sawmill Reopens

/ caflynn / Leave a comment

Take note of where the fiber will be going…

[article/pic taken from Lignum al Dia, a Chilean online publication]

“With the presence of Seremi Labour, local authorities and company executives, this morning was made the official reopening of the Sawmill Horcones Arauco II.

Through a tour of the facilities, it marked the official resumption of operations of the sawmill, located in the Forestry Industrial Complex Horcones, located in the town of Arauco.

The reactivation of the Arauco Mill Horcones II has meant hiring 165 workers. The resumption of operations of the industrial facility is a contribution to the creation of stable employment in an area particularly hard hit by the earthquake and tsunami on 27th February.

This production unit was closed since December last year, resulting from the crisis affecting the sector. When you restart operation, it hired 120 employees in the operation, mostly from the province of Arauco, Arauco communes and Curanilahue, and 45 persons from casino personnel, porters and guards.

The monthly production capacity Horcones II regime will be 14,500 m3 of green wood, and the main destinations of its output will be the domestic market, the Middle East, Asia and Central America.

Thus, of the 35 facilities Arauco who were detained since the earthquake, or in the case of Sawmill Horcones II from before, 34 and are operating normally.  It remains to Line 2 of the Pulp Mill Horcones, in which case it is not yet possible to specify the date on which restarted production.”

Freeport Delays

/ caflynn / Leave a comment

[edit: containers through, we’re good to go, less interuption that we had anticipated]

There have been recent vessel delays at Freeport, which has disrupted WindsorONE fiber supply to our Surry, VA manufacturing plant.  We have already contacted our customers, and will continue to keep you up to date… and as always, post to this blog.  We expect about a week of possible WindsorONE shipment delays/disruptions; net result, week of June 28th there will likely be zero shipments from Surry, but quickly shipping again the following week, July 5th.

On March 29th, a tornado touched down at the Freeport port in the Bahamas, which is a major vessel/container transfer station.  They were able to bring the port back online relatively quickly, however they did sustain damage to some cranes, which has been causing disruptions the last couple of months.

To date, we have been able to work through the delays; however, on Thursday evening (17th) we were informed that two groups of containers will not reach the states on time, as they missed a vessel headed to Norfolk.  We have already made arrangements to have these containers routed to Charleston, where we will offload them and truck to Surry, VA.  We are also sending fiber across the country via truck from our Willits, CA plant.

Under normal operations, customers would not feel these disruptions as we would have plenty of raw material reserves stateside; we prepare our raw material pipeline for these types of delays.  Unfortunately, given current demand, we haven’t yet been able to build entirely back to pre Chile-8.8-quake state-side levels.

We currently do however have plenty of raw material in the pipeline, we just need to “umph” get it through Freeport.  The first group of containers is already on the water, and will arrive to Charleston on Sunday.

Please don’t hesitate to contact me with any questions.

In Solidarity,

Craig (craig@WindsorONE.com)

SFI vs FSC – Interesting Read

/ caflynn / Leave a comment

An article below by John Wagner, as written in LBM Journal:

“(www.LBMJournal.com) If you ever want to elicit groans from dealers, just mention FSC (Forest Stewardship Council). Dealers pay fees to obtain the FSC “Chain of Custody” certificate, and then they pay more fees to renew that certification. Now, if you think the dealer groans about FSC are loud, just mention FSC to builders. Since USGBC’s LEED standard accepts only FSC-certified lumber, builders are forced to buy it, often at a premium, to achieve the LEED lumber point. Typically, builders overbuy FSC lumber, mistakenly believing it’s required throughout the entire LEED job. Not true; see below.

Do you get a greener wood with FSC than with other reputable wood certification systems? Frankly, no. That’s one reason the SFI (Sustainable Forest Initiative) is fighting so hard for LEED recognition. The core of the problem is that USGBC considers SFI a so-called “industry-sponsored program”—and in the eyes of USGBC that somehow compromises SFI’s ability to protect forests. At press time, Building-Green.com reports that the new LEED wood certification draft language would allow for “multiple levels of compliance, and assigns half-credit, full-credit, or double-credit to programs based on the degree of compliance.” FSC of course gets access to the full point. Non-FSC standards would settle for less.”

Read the rest of the article HERE…

Chilean Port Status, 4/26

/ caflynn / 2 Comments

Our ForAction team in Chile is reporting the following:

“The actual situation of the port is:

– San Vicente , working to 100%

– Lirquen, working to 100%

– Coronel, working to 100%”

Great to hear that things are back to 100% at all three ports…

BOOM! Here Comes the Fiber!

/ caflynn / Leave a comment

Surry, VA Plant: Boats are still on schedule to arrive into ports this evening, and unload in the morning.  All containers have been cleared and trucks will be standing by to pick up as soon as containers are off-loaded.  We have raw material for three weeks of WindsorONE production due to arrive between this evening and Friday evening; and we currently have an additional six weeks of raw material on the water.

The Surry, VA Crew will be coming in tomorrow, and working through the weekend so that we may begin to ship WindsorONE next week, at 100% capacity.

Surry, VA plant raw material pipeline is full and intact!

Willits, CA Plant: Currently manufacturing, will be a few loads short in shipments this week, and back to 100% capacity of WindsorONE shipments next week. 

Willits, CA plant raw material pipeline is full and intact! 

Our ForAction team in Chile is running strong, and we expect no future disruptions in their supply.

We’ll be playing “W1-order-catch-up” over the next few weeks, yet looking forward to a return to normal shortly thereafter.

In Solidarity,

Craig

The Tough Two…

/ caflynn / Leave a comment

This week and next will be the damaging two weeks for our customers due to the Chile 8.8 Earthquake.

Other than two roll-over trucks from last week, we will have zero WindsorONE shipments from our Surry, VA plant this week and next; and the Willits, CA plant will have a handful of WindsorONE shipments pending domestic raw material.

With no raw material, plant crews will unfortunately be at minimum; however, we will be aggressively prepping the plants to process raw material arriving the end of week of 4/12, where we’ll work through the weekend for manufacturing and shipments of WindsorONE the week of 4/19.

Additionally, we’ll work overtime the weeks of 4/19 and 4/26 in order to maximize WindsorONE shipments to our W1 Dealers.

While we’re doing everything within our control, we’re aware that our customers are still losing revenue from lack of WindsorONE shipments.

“Great Blog, Craig, the W1 Insights have been excellent.  However, I’m still out of 1×6…”

We understand that, and would appreciate the opportunity to actually DO something in that regard.

Correct, we can’t make up for lost shipments; however, we’re hoping we CAN find a way to make up for it by helping to increase your company’s overall sales (not just W1) throughout 2010.

Give us a few days on exactly that concept; we’re brainstorming some things.

Strong revenue generating idea/s for W1 Dealers coming soon…

In Solidarity,

Craig

The Big Kahuna Isn’t So Big

/ caflynn / Leave a comment

The Windsor Mill ForAction team has done an excellent job with our raw material procurement in Chile; as a result, the WindsorONE price increase will stay in the single digits. Excellent work down there ForAction Team.

WindsorONE price increase: 7%-8% (fob mill), pending thickness/width of sku.

Approximately two-thirds of our total raw material is supplied to us by strategic partners, and one-third we source on the open market.  To date, our partners have been able to hold log prices to us, which is the reason for the single digit increase in price.  The other one-third of material that we procure in the open market has seen significant increases in cost, both in the Radiata we’ve purchased, and the domestic pine (this will be used at the Willits, CA Plant for West Coast shipments).

Please give us the day Monday to prep new price lists for each of you, and you should have them from us Tuesday morning.

The price increase will take effect on all shipments leaving the week of April 19th.

The next question of course is will WindsorONE pricing be reduced should market conditions settle, to which the answer is an absolute “yes.”  However, it’s going to be an interesting year, and we just can’t predict right now exactly how things are going to play out.  Here are some additional market insights in that regard:

  • Significant manufacturing capacity temporarily and permanently reduced at Arauco, CMPC and other large producers due to earthquake;
  • Chilean port restrictions and availability of ships will exacerbate the supply causing market price spikes, and there may be further pressure due to strikes at ports in Finland, which could put added pressure on ability to reserve space vessel in Chile due to competition w/ pulp;
  • 30% of NZ sawmill capacity is gone in the last 12 months due to the prices low last year;
  • Australia has a strong economy with limited export availability;
  • China receives 50% of Radiata supply from Chile and 50% from New Zealand, as a result of the inability to purchase what they need from Chile, they’re aggressively purchasing from NZ and elsewhere;
  • US domestic alternatives in weaker supply, and significantly higher prices;
  • Alternative species, such as EWP and Poplar 20% higher than Radiata;
  • Brazil, Argentina have little availability in blanks and block;
  • Start-up costs in Chile will force price increases to cover inefficiency caused by uninsured events;
  • Reinvestment in Chile plants and equipment will require higher prices to substantiate investment and returns;
  • Chilean Peso 10% stronger over the past year;
  • Brazilian Real 25% stronger over the past year;
  • Worldwide freight rates on the rise.

As always, please do not hesitate to contact me directly should you have any questions.

In Solidarity,

Craig

Shipments, Pricing, Conceptual Selling

/ caflynn / Leave a comment

Three Messages:

1) WindsorONE Shipment Status: Jan Hull (Executive Account Manager) will be contacting your organization w/ your current WindsorONE shipment status given the previously reported 6-day delay in container shipments.

2) Cost Structure Impact: Looking to have this completed by Monday.  Please note, the additional time we’re taking to calculate the financial impact to procure raw material and to manufacture WindsorONE will help us achieve, as best possible, consistency in pricing over time, given unstable markets.

3) Conceptual Selling:  Speaking of pricing… drop me an e-mail (craig@WindsorONE.com), and I’ll send you a couple copies of this excellent book that will help your sales organization get away from competing on price, and better help your sales organization compete on Unique Strengths and Value. (W1 Dealers only)

Six salespeople from three W1 Dealers recently went through a 2-day Miller Heiman Conceptual Selling Workshop; it was so powerful that all are now working towards implementing the methodology throughout their respective sales organization.

If you’d like to hear a Dealers first-hand Conceptual Selling experience, don’t hesitate to drop me a line, I’m more than happy to make an introduction.

Until Monday…

Craig