The Why Behind the Babine Rebuild
Thursday, January 10, 2013 @ 10:33 AM
Prince George. B.C.- The decision to build a new sawmill is not like the lumber industry, in other words, it is not cut and dried..jpg)
Hampton Affiliates President and CEO Steve Zika (in photo at right, 250NEWS) says building a new sawmill in Canada is a different game than in the U.S., and especially in an area where the supply of timber is not as certain because of the mountain pine beetle. “Everyone says there are lots of logs in the bottom of Ootsa Lake, and that’s true, but it is not economically viable to get them out until lumber is selling for $1,000 .000 per thousand” said Zika to the Natural resource Forum in Prince George.
Zika was outlining all the factors that came into play in the company’s decision on whether or not to rebuild the Babine Forest products mill which was levelled by an explosion and fire in January of 2012. In the end, Hampton would make the commitment to rebuild, but it wasn’t a decision that came without weighing all the issues.
He says the price of lumber is going up, but so is the price of logs in the north west U.S. and there is the added dynamic of log exports to China which reduce the available resource in that part of the U.S.
Labour costs in B.C. are now about 1/3 higher than that in the Pacific Northwest B.C. because of the strength of the Canadian dollar. In the Pacific Northwest other challenges include the labour shortage “Young people want to be at Starbucks and doing the social media thing , so going out in the woods to be a logger just isn’t very sexy.”
“The other problem we face in the Pacific Northwest is that the forestry industry is viewed as a sunset industry, Facebook can open up an office with six jobs and it’s all over the front pages, but we open up a site and provide jobs for 40 people and nobody notices.”
So what was the tipping point that convinced Hampton to rebuild Babine? “The commitment from First Nations was the deciding factor” says Zika. The new mill be much smaller and more efficient in terms of technology and dust collection. It is expected to produce about 200 million board feet annually compared to 340 million board feet per year from the old mill. He says there has also been great support from the Steelworkers Union. “We recognize that when it comes to timber supply we are taking a big risk, and while it wasn’t certainly the only factor, we also recognized we have certain social responsibility.”
Zika says the positive workof government in Canada is a positive “We would be in a world of hurt if it wasn’t for the marketing and wood first policies .”
The future looks promising as Zika says the U.S. housing market is starting to rebound at the same time the Chinese demand is growing so the road ahead looks positive “I appreciate what the people in British Columbia have done for our company, and I am very optimistic.”
Comments
I suspect that this company has lucked out, in a way, in that rather than being stuck with an oversized mill for the timber supply picture of the next several decades, they have been handed the ability to build a smaller and better mill, sized for the capacity of the forested land around it, getting some insurance dollars to help them and some government assistance as well.
The negative side, of course, is that two people had to die for that and some others get maimed for life.
I, for one, probably among many, am happy that they came to this decision. Burns Lake needs the industry. Perhaps now, this will spur others in the community to start up different businesses as well, to diversfy the economy.
I hear so much about “diversify” and I ask myself into what, you just don’t have the Pool of Trained People or Tradesman to make it work.
New mill with 4 employees per shift should help the Burns Lake economy! They could workshare the jobs so they don’t have to pay benefits.
Hampton are real cool dudes. They don’t even have the insurance payout yet, but in typical American fashion, ‘damn the torpedoes, full speed ahead…’ Compared to the chickens over at Lakeland who are just so happy feeding us bs and cashing their business interuption insurance cheques every month.
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