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LAST WEEK's article "Early Wildfire Season " can be found HERE
The always raucous Annual General Meeting of British Columbia's Truck Loggers Association took place over three days this week in Victoria, BC. Attendees included coastal lumber producers, log harvesters, log haulers, equipment suppliers, agencies, and high-ranking government officials, TLA presentations and exhibitors, all of whom never fail to impress.
This year's speakers included: Patrick Moore, a founder of Greenpeace; BC's Minister of Jobs, Tourism and Innovation, Pat Bell; Don Demens, CEO of Western Forest Products; Peter Lister, Manager of Lumber Manufacturing Technology FPInnovations; BC's Chief Forester, Jim Snetsinger; Rick Jeffery, CEO of the Coast Forest Products Association, and more.
Kicking off the first session after lunch on Wednesday was Moore with a great speech on global sustainability. Madison's asked those nearby what they thought would have happened 15 years ago if an organization such as the TLA had invited a staunch environmentalist as keynote speaker. Much rolling of eyes and guffaws ensued. How things have changed, and in a good way!
69th AnnualMoore broke down the political climate in North America in regard to ecology issues, and explained some of the hurdles and successes experienced by various industries. He laid out the distinction between terms like 'sustainable', 'clean', 'renewable', and 'green' and the level of importance of each to the environment. The last of these, it turns out, "has no definition, is purely a marketing term" explained Moore. The others certainly have their place, with 'sustainable' being the most relevant to the forest industry.
"Forestry is the most sustainable of all industries," said Moore, "that supply us with what we need every day. There is the same amount of forests in North America today as there was 100 years ago."
A question from the floor about what the forest industry can do to offset the deliberate campaign by environmental groups to brand all use of wood, and all timber harvesting, as bad, prompted Moore to declare, "You need to spend more money on education. The forest industry is not operating in a retail mentality, its a wholesale environment. Does General Motors spend 0.01 per cent of its revenue on branding? The forest industry needs to invest in marketing and advertising to change that image."
Pat Bell revealed the latest lumber exports statistics from BC to China, which -- at 4.28 billion board feet and $1 billion to November 2011 -- have surpassed levels for all of 2010. Bell also referred to "a major China company coming to set up a head office here in BC," stating that details will be forthcoming in about three months.
Otherwise, the main new information provided by Bell was his assertion that the Jobs Ministry would like to see more use of "the fibre resource coming from north-central Vancouver Island", that there is potential for a "high speed second growth mill." In his own speech the next day, Rick Jeffery responded to this suggestion with, "it is unrealistic to expect that log costs will be reduced" in order to allow such a mill in Courtenay-Comox to be productive.
Don Demens released details of some very exciting plans for Western Forest Products.
"Western's business strategy is to be globally competitive in forest products," said Demens. "We have a $220 million investment plan for the next two years, $125 million of which will be in new capital or mill upgrades. We will be getting all eight of our mills reopened, with three of those becoming Hemlock mills. We are going to improve the operating efficiencies of our existing mills and put our employees back to work."
Due to the many challenges of running a lumber business on the coast, from difficult terrain to transport costs to the fibre basket and others, Demens said, "we must have critical mass, scale is important. Western has to produce sufficient volumes to mean something to our customers."
Demens went on to explain that 55 to 60 per cent of Western's product goes offshore as breakbulk, that 40 per cent of log sales go to domestic buyers and that 10 per cent of log sales are ". . . exported offshore to capture margin.
We harvest our entire profile, and export 1 cubic metre of logs for every more than 2 cubic metres that go to our mills." Demens also said that 5 or 8 per cent of Western's Cedar volume now is sent to China, which ordered no cedar at all just a few years ago.
The next speaker was Peter Lister, with some great data on developments in uses for engineered wood and demand for it from the US.
"In 2006, 39 per cent of BC's softwood lumber went into US single family housing, in 2010 that amount declined to 13 per cent," Lister explained. "The smallest percentage goes into non-residential US construction, therefore this is where the huge opportunity is."
Lister then provided updates on light wood frame construction for six-storey buildings, post and beam construction and its cousin glulam, cross-laminated timber (CLT) and hybrid construction. These last two are rapidly becoming very popular with countries all over the world, especially CLT because it involves "prefabricated components that can be dropped into place" which facilitates extremely fast building. The eight-storey CLT building in London, England, went up in 28 days last year.
[insert FPInnovations pie charts of US demand for BC wood 2006 - 2010]
Jim Snetsinger's presentation also covered a lot of data. The topic that generated the biggest impact was his declaration of the "regeneration success of the coast. Over 30 per cent of the coast's Timber Harvesting Land Base is old growth, meaning more than 250 years old. As well, there is excellent regeneration, there have been no compliance issues with operators, and there is an excellent second growth coming online. There will continue to be a transition to second growth harvest, which started in 1995, and is now about 34 per cent of the coastal harvest."
Rick Jeffery focussed on new markets for BC wood, specifically China.
"China is now the second-largest global consumer of wood products," said Jeffery. "In 2007 China imported 6.6 million cubic metres of wood products at a value of $170 per cubic metre, in 2011 those imports were 20 million cubic metres at $230 per cubic metre. Currently China has a wood deficit of 100 million cubic metres, by 2020 that figure will be 250 million cubic metres. Canada is China's largest provider of wood products."
As for India, Jeffery explained that country has the same kind of infrastructure and supply chain issues, and lack of a wood culture, as China did ten years ago.
"India has an 80 million cubic metres per year wood deficit, and growing. Canada is at a $50 per cubic metre shipping disadvantage to India compared to Australia. But with $12 billion per year in annual non-residential wood demand, or the entire production of BC in a year, there is plenty of opportunity for growth for BC wood producers."
Jeffery also said, which has already been mentioned in Madison's several times, that the demand for wood in India is for high value product. Shop grades, mouldings, trim, flooring, often stained and cut to size, as compared to the structural framing lumber preferred by the US and by China.
