BTB:39 ADDING VALUE
Published on: Wednesday 1st April 2015
– Paul Iarocci
Russell Stites, owner of Pro South (encompassing Pro Logging and Pro Trucking among other ventures) based in Booneville, Mississippi, often brags about his 18,000 hour Tigercat 234 loader. (See letter to the editor in BTB 38, November 2014.) As we stand on the deck watching one of Russell’s six crews in action, he gestures to the old 234 loader and the approaching Tigercat E620C skidder. “That is my favorite skidder and my favorite loader. They’ve paid for themselves two times over.”
The E620C has 13,000 hours on the meter and the 234 has worked over 18,000 hours. The 2006 model loader is still on the original engine, achieves good fuel economy and meets the same production quotas as his new loaders. Russell has no
shortage of 234 loaders to compare against. A fleet of 25 Tigercat machines including nine 234 loaders is spread among the
six crews. Russell buys his Tigercat gear from B & G Equipment, Iuka, Mississippi. In addition, the trucking arm of the company (Pro Trucking) runs 30 trucks and 80 trailers. The logging crews are configured for either three or five men – providing flexibility to respond quickly to changing market forces in the 100 mile (160 km) radius Pro Logging normally works within. These days the crews are mostly engaged in clear felling operations.
Russell is definitely part of the next generation of contractors whose success is built on a combination of factors including hard work, smart growth tactics, vertical integration, relationship building and adaptability to change and new opportunities. He got his start in the industry at the age of eighteen working on a logging crew owned by his father, Danny Stites. Danny established the hardwood crew in 1995 primarily to supply logs to his main business, American Timber Co. – a sawmill in Baldwyn, Mississippi.
After working on the crew for four years Russell bought it from his father in 2000. Reminiscing on the company’s growth and where they were at the time they purchased that first 234 loader Russell says, “In 2007 we had just split into two crews
and I was buying the timber. Now, I have three full-time timber buyers.” General manager, Jimmy Smith has been with Russell from the beginning and also worked for Danny back in the nineties.
The procurement team is just the tip of the proverbial iceberg. Russell has grown the company to 80 employees with 30 working in the woods on the harvesting crews. “Our logging force is the backbone of the company. I can’t take on the growth opportunities that I do without knowing I have their support.” Russell adds that most of the crew leaders are highly-capable and reliable, longtime employees.
The company commissioned the construction of an impressive new shop and office facility, completed in 2013. The large, well-outfitted shop allows the company to remain quite self-sufficient and able to manage and maintain the large equipment fleet. “What I like about Tigercat is that we can run the machines into high hours. Roger Anglin, our Tigercat trained mechanic, allows us to keep the older machines running.”
The new building overlooks an expansive wood yard with a 100,000 ton wet or dry capacity. For Russell, the wood yard tames the company’s seasonal harvesting cycle. “Staging wood helps us work consistently in the summer and works around the quotas,” he explains. The wood yard enables Russell to stockpile wood when harvesting conditions are favourable and to pull inventory wood from the yard to supply the mills during extremely wet winter weather conditions when the mills face shortages.
Pro Logging is essentially taking on a portion of the inventory and wood flow management responsibility and packaging it as a value-added service to its customers. It’s this type of smart growth and business development that Russell strives for because it adds real value. “Times have changed. Due to year-round quota restriction and tight profit margins, moving an extra load of wood no longer holds the same value as it did when I started logging,” he says. “Adding value, securing additional mill relationships, buying standing timber, the sawmill – this all adds value to what we do. But just trying to cut another load doesn’t add the value it once did.”
The procurement side has also added value to the business, providing Russell with more control and another tool to negotiate the seasonal and cyclical nature of the business. Throughout it all Russell has developed excellent relationships with landowners and mills.
As the Pro South group of companies became more vertically integrated – combining procurement, brokering, harvesting, trucking and inventory management – the next logical step was a sawmill, which became operational as of February and is anticipated to be fully functional by mid-2015. “We have supplied hardwood sawmills with logs for twenty years,” explains Russell. “Now we want to add value by doing our own sawing and planning to fit our needs.”
Another value-adding development that Russell is embarking on is the Forest Stewardship Council (FSC) forestry management group audit process. Russell explains that the certification provides a chain of custody where a log can be tracked back to the forest where it was grown. FSC promotes environmental protection and provides companies like Pro South the potential to access new markets – many major companies have policies that state a preference for FSC-certified products. Increasingly, consumers and governments are requesting FSC-certifi d products. For example, the US Green Building Council’s LEED program provides incentives for using FSC-certified materials. For all these reasons, Russell sees the certification as an important opportunity.
Throughout this extended period of growth, Russell has come to rely on the durability, uptime and productivity of his Tigercat equipment along with the service and parts support of B & G Equipment.