CASCO – Hancock Lumber is going far afield to find its next customer — 6,600 miles away to Japan.
Company executives leave today for a two-week tour of Japan to meet with architects and builders in hope of landing lucrative export contracts for Hancock lumber products. The executives will tour the country and visit areas devastated by last year’s earthquake and tsunami where building products are in demand.
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The trip, organized along with the Maine International Trade Center, the Evergreen Building Products Association, the U.S. Commercial Service and the Softwood Export Council, is part of a five-year effort by Casco-based Hancock Lumber to expand internationally.
Hancock Lumber’s export business, which started in 2007 almost as a fluke, now represents 25 percent of its sawmill operations and generates 12-15 percent of the company’s total sales of more than $100 million.
The company now exports to 15 countries, including Canada, Jordan and China.
“We never sat in a board room and said ‘Let’s do this,’” said Kevin Hancock, the company’s president and chief executive. “But we have a culture of trying a lot of different things. We’re constantly looking to improve. Looking globally really fit our culture.”
“Once you make that leap psychologically to doing export work, one thing leads to another. It builds on itself,” he said.
Its first international order went to a Pakistani customer who wanted 1 million board feet of lumber — usually Hancock sells lumber by the truckload.
The company had to dedicate one mill to the order for several months. A customer on the West Coast had recommended Hancock for the job.
“It was definitely an unusual order request,” Hancock said. “We had to mitigate risk in terms of credit partners, freight risk.”
“It would be a mistake to think we were freewheeling from a risk standpoint,” he said. “The message is that we were adventuresome in spirit, but disciplined in paying attention to every detail.”
Using eastern white pine, Hancock Lumber makes everything from clapboard siding and decorative trim for windows and doors to finished lumber used by manufacturers to build a variety of wood products. It produces 70 million board feet of lumber per year.
Hancock said the company’s lumber is now a mainstay in Pakistan and the name Hancock Lumber has become a well-known brand there.
The Pakistani order got Hancock Lumber to think internationally just as the U.S. economy was cratering. The bursting of the housing bubble would have had a dramatic effect on the company if it hadn’t offset its domestic decline with new international business.
“The traditional housing market was decimated. We either had to expand our marketing reach or shrink dramatically,” Hancock said. “Our export work has had a significant impact on production.”
The economic crisis triggered a 24-percent drop in U.S. housing starts — the beginning of new home construction — in 2007 and the decline continued for two years before starting to stabilize in 2010. Yet, during the crisis, Hancock kept its three mills operating and its 200 sawmill workers employed. Including its retail store operations, Hancock employs a total of 405 workers.
On Thursday, the company will be awarded “Exporter of the Year” by the Maine International Trade Center.
“We just kept our heads down and were willing to invest the time. We woke up one morning and one out of every four boards is going internationally,” Hancock said.
Building an international business didn’t happen overnight. Hancock Lumber often talks with an international client for more than a year before formally doing business. Hancock Lumber also sends a shipment of test products to clients before an order is placed.
Producing lumber for an international client is also complicated by differences in the units of measurement and specifications between U.S. clients and those overseas.
In the course of a day, its Casco mill might be producing 1-inch boards for a U.S. customer and 33-millimeter lumber for an international client. The company had to make a lot of changes to the mill and machinery to handle different board sizes. Executives now have metric-conversion apps on their iPhones, as well as translation apps that help them translate any language into English.
Reconfiguring the Casco mill helped Hancock with all its customers, allowing it to nimbly change from one product to another during the course of a day. Each board has the Hancock logo on the edge, along with a code that designates the customer.
“Each worker knows where every board is going. They can be working on a U.S. client in the morning, a Chinese client in the middle of the day and a Pakistani client at the end of the day,” Hancock said.
Working around the world has meant more travel, unusual food and efforts by company executives to learn the niceties in other languages. Plus, there’s the occasional unsettling moment traveling overseas, such as having guards with machine guns and metal detectors at their hotel in Guadalajara, Mexico. Executives have also become more aware of international politics.
“You’ll never be all set on exports. Politics and economies fluctuate. You have to always be on the lookout for the next market,” said Chief Operating Officer Kevin Hynes.
“You never really know where exports are going to take you. You have to have the mindset of being globally aware and be willing to talk to a lot of potential clients to find the nuggets and the really good clients,” Hancock said.
Hancock lumber now travels the world, but still sometimes ends up in the company’s backyard. For example, Hancock sells wood that is sent on container ships for a two-month trip to Shanghai. It’s then made into the wooden supports that artists’ painting canvases are attached to. The canvases are shipped back to the United States and sold in Walmart stores nationwide.
“If you go to the local Walmart in Windham, you’ll find a canvas made in China with Hancock lumber,” Hancock said.
All of Hancock’s customers have gotten much more demanding during the recession — wanting “just in time” delivery so they don’t have to hold inventory on their lots and wanting to inspect every board that comes into their facility.
“We get a phone call now if every board isn’t perfect,” Hynes said.
Hancock previously made lumber for the mass market, but now it produces a lot of custom millwork for individual clients.
“It would have been really easy five or six years ago to say ‘no’ to all of this. The ones who fought it didn’t survive,” said Matt Duprey, vice president of sales.
Staff Writer Jessica Hall can be contacted at 791-6316 or at: jhall@mainetoday.com
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