Woods Industry Needs Careful Planning

By 250 News

Entering into the New Year, we know we are facing the prospect of a down turn in our forest industry, what is not known is when that will take place. 

The BC Progress Board Chairman, David Black, says the beetle epidemic is likely to have run its course by 2013 at which point the, 80% of the pine will be dead. 

A 16% drop in the Prince George timber supply area would result in a job loss in the region of about 2,700. That would result in a $100 million dollar annual loss of labour income . If you add a further revenue reduction to the pot of about $585 million dollars, the effect in this region will be substantial. 

The area in question  (which is expected to be second only to Quesnel in being the hardest hit area for the Pine beetle in the province) takes in Vanderhoof, Fort St. James and the Prince George region. What effect that would have on the total economy of the region has become a guessing game. 

Woods industry experts say they will have to sharpen the tools in order to make certain the loss of timber does not drive them out of business. One operator says "We have been tooling up our ability to grow trees faster and we will have to take wood from the bush that in the past we would simply pass over."  

 Asked about the possible expansion in the forest sector at this time, he added "It would be pretty stupid to now spend millions of dollars building a new facility knowing that when you are up and running you only have a few short years before you have no timber supply. I don’t see any major expansions coming this way."  

Here are the scenarios you receive from the major operators in the region: 

The Chinese market is not going to be what it was first thought to be,  in fact we could see them in competition with Canada in selling lumber on the world market. The reserves in Russia are much larger than Canada.  The Chinese are ever increasingly tapping into that market to acquire raw logs. The Chinese have also established a good market for raw logs from countries such as New Zealand and have said they want to establish their own industry. Labour costs which are 90% below the Canadian market ensure the Chinese will have no problem finding markets for their product.

It has been rumored that one of the three pulp mills could be heading for mothballs given the current over abundance of  pulp and paper. The wood chip piles are at all time highs and companies that have pulp mills have been awash with chips they do not need. 

In the end one industry official says, "Five years I think is too soon, it’s more likely that the industry will hit the wall in about seven. Either way there are problems on the horizon."

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