Can B.C. Meet the Lumber Demand Caused By Sandy?
Thursday, November 15, 2012 @ 11:00 AM
Prince George, B.C. – It has been estimated there are 150 thousand homes along the U.S. east coast which have been left either damaged, or destroyed by Hurricane Sandy.
When it comes time to rebuild, can B.C. respond to the demand?
According to the Province’s latest year to date stats, B.C. had shipped nearly $1.5 billion dollars worth of softwood lumber to the U.S. as of the end of September. Can lumber companies here ramp up their operations to meet the storm created demand?
That remains to be seen. Keep in mind, Lakeland Mills is not operating, Burns Lake Babine Sawmill is not operating, and the biggest challenge is to find the contractors to get into the bush and do the logging.
MaryAnne Arcand of the Central Interior Logging Association says the forest industry is facing a major shortage of skilled labour, and in many cases, it has no one to blame but itself. “During the downturn, we were telling our truckers, loggers and heavy equipment operators to diversify, make their skills transferable. Well, they have transferred those skills to the mining and oil and gas sectors where they are making a lot more money.” She estimates there is a current shortage of about 2,000 workers in forestry in B.C. “My guys are turning away work because they have no one to operate the machines. We have millions of dollars worth of capital investment in machines sitting idle, because they don’t have anyone to run them.”
She says it is difficult to put the demand into perspective, but, for instance, she notes Quintet Mine in Tumbler Ridge will re-open in the spring, and that mine will need 650 truck and equipment operators. “Mining’s recruitment strategy is ‘F to M’, Forestry to Mining. They go after my guys first because their skills are the most directly transferable, they know how to work long hours, they know how to work in the bush in the winter, and they pay more than we do.”
She says for too long, forestry has been portrayed as a sunset industry, “When you’re a young person looking for a career, you’re not going to go into what everybody says is a dying industry.”
She says the shortage is not just among operators, there is also a shortage of contractors “To ask investors to make that kind of investment when there are still limited returns compared to other resource industries is very difficult.”
What is the answer? Hiring foreign workers is a tricky proposition says Arcand, as a good working knowledge of English is critical for drivers and operators to communicate safety protocol, not to mention dropping someone who is not familiar with a Canadian winter into the bush in late November. She says a survey last year showed 95 of CILA members were feeling the impacts of a truck driver shortage, 85% were feeling the impacts of a shortage of equipment operators some had just 40-60% utilization of their heavy equipment, and that just doesn’t make good economic sense.
Comments
“My guys” .. eh? … ;-)
Here is what New Brunswick industry thinkshttp://www.cbc.ca/news/canada/new-brunswick/story/2012/11/05/nb-lumber-demand-forestry-brunswick-sandy.html
“A forest industry observer predicts New Brunswick mills will see strong demand for their lumber for the next four to five years.
“He expects damage in the northeastern United States from superstorm Sandy will continue to bolster demand, which is good news for the province’s forestry industry, which employs about 10,000 people.
“It’s probably going to take the better part of a month to six weeks for that demand to really start showing up, but basically there is an awful lot of repair and renovation-type work to do,” said Kennedy.”
Well its time we slowed down our exports.My Grand kids will also need a few trees th build their homes. Its time that great nation next to us started to use thier own resourses.
Cheers
Good plan Retired – now that your generation has had its fun lets cut it back. Maybe you can leave your house to your grand kids in a will since they wont have jobs to afford to build thier own homes…
“Good plan Retired – now that your generation has had its fun lets cut it back.”
No kidding. Nowadays, it seems that many of the most privledged generation in human history all of a sudden wants to grow a conscience.
“most privledged generation in human history”
You must be referring to the oil rich regions of the world with low national populations …. ;-)
The rest of us are just more priviledged because we have evolved to using our brains more than our muscles ….. well, all but our various Municipal Councils over the last decade or so ….. LOL
We prospered because we sent beaver pelts to Europe ….. then we sent grain …… now we send lumber ……. now it is back to hay ……
We prosper very little on sending quality manufactured goods unless there is some sort of central government trade agreement involved, such as the Auto pact.
We will know demand has picked up when we see Winton Global operating again. I’m surprised they aren’t already with prices well above the $300 threshold. Most of the lumber yards in this region are already empty compared to how they looked the last few years… some mills already running extra shifts on overtime.
Eagleone,
You mean Winton Global, that antiquated, shuttered up out of date mill sitting and rusting away in Bear Lake?
You got a spare 50 million or so? Thats what it will take to get it going.
They are in Bear Lake?
They have an operation on River Road as well. I thought they were dead in the water, so to speak other than possibly their truss/prefab operation.
From the Opinion 250 story of over a year ago
“The lumber plant sites in Prince George have not been operating since June of 2008, and yesterday September 29, 2011, Sinclar Group announced that shut down is permanent.”
http://www.opinion250.com/blog/view/21584/1/news+of+winton+global's+permanent+closure+bittersweet
So, with Lakeland burned out and no news about rebuilding and Winton Global shut down “permanently”, and the wood to be cut being predominately northwest of here, why would either of these mills, especially both, and especially in that god awful location get back up and running?
First they logged what they could.
Then they got more and more mechanized and clear cut because it was cheaper that way, then they just creamed the best and left the rest.
The rest became pine and spruce bug food.
Now all we have left is a province full of beautiful green dyed, brittle wood.
Lumber industry, does it still actually exist?
The reason that these workers aren’t returning to the lumber industry is because they are earning higher wages in other industries. If you want the best skilled labour, pay the best wages. As far as meeting demand, mills will throw on another shift, over supply the market and drive the price down, just like they have done for decades.
Gus..
Winton’s Bear Lake operation was a sawmill only which sent green rough lumber to be dryed and planned here at the PG planer mill.
About the forest industry loosing workers..Tough shit for them.. they have been the fat cats on the block too long and have been able to minipulate workers and wages..Now they are getting bit in the ass.
How much BC lumber went to fix up New Orleans? Not much! How much will go to fix up the east coast? Not much!
It’s quite possible that shareholders in lumber companies are also shareholders in the mining and oil sectors.
Angera–are you nuts?? I know at least 50 people who worked in the lumber industry and were starving here before they left the province. A few of them received money from the feds because their jobs were gone forever. The large majority of the older ones (55 plus) never got another job and if they did it certainly didn’t pay anything like the lumber industry.
Funny thing, I dont remember equipment operators in the forestry industry complaining about wages. 6-10,000 a month is pretty good wages where I come from.
The shortage of workers comes from the seasonal aspect of the industry. Last winter was a very good winter for most loggers, then they have 2-4 months off in the spring and early summer. Some work the hours to enjoy the time off, others head out to other areas to keep working.
I can say this, its always better to have a bit of a shortage of workers and equipment, if you have an overage that drives wages and profits down.
Northmans got it right. One of the reasons Winton is gone, is because they were hauling the rough lumber from Bear Lake to the planer in Prince George. They have been doing that since the late 50’s and early 60’s however times change, the operation was no longer cost effective. Another reason was Canfor has a planer, and sawmill in Bear Lake and they can process Wintons timber in Bear Lake by adding on some shifts.
Most mills in this area have not exactly been good employers, especially to contractors, etc; So if they cannot get good workers now they can blame themselves.
As for covering the lumber for the US East Coast, that will not be difficult. Mainly because the lumber that went to China was rough lumber for concrete forms, and was not put through a planer. Mills did not get a very good price for this lumber.
Once the US market turns around the Chinese market will disapear. In fact exports to China started to decline a few months ago, because of the increase in the US price. Japan also pays much more for lumber than Japan.
Contrary to what Pat Bell and some others may have you beleive the sales to China were always tenuous at best, and only came about because of a Russian embargo on logs to China.
So hopefully by this time next year the lumber exports to the USA will be back close to where they were before the collapse of the US Housing market.
Should read. Japan also pays much more for lumber than China.
Japan buys “J” grade lumber which is a much higher quality than the wood shipped to China . That is why they pay more.
I hope BC cant keep up with the demand.
Its all about supply and demand, if the demand is high, the price is high. If the supply is high, the price is low. Not hard to figure out.
A high price brought on by a reduced supply will quickly lead to substitutes increasing their market share. Weyerhaeuser did a study several years ago that revealed that the per capita consumption of sawn wood products peaked in 1900, and has been in steady decline ever since. If you look at the number of things that used to be made from sawn wood, and now are made from something else, often not involving the use of any wood product whatsoever, it’s easy to see they were correct. No wonder so many big US forest products companies, and some Canadian ones, too, are now making more from selling the (tree) farm, rather than continuing to harvest it and process the product.
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