Clear Full Forecast

Red Letter Day For BC Forest Industry

By Michelle Cyr-Whiting

Thursday, December 09, 2010 12:24 PM

Prince George, B.C. - B.C.'s Forests Minister Pat Bell says it is a Red Letter day for the forest products industry...

He admits the U.S. housing market remains very depressed, with housing starts down 11-percent from September to October, but says the good news for B.C. is an incredible upswing in the emerging Asian market.

For the first time in B.C. history, the total volume of forest products exported into China and Japan has exceeded 40-percent.  In the month of September, the total forest product exports, including pulp and paper, to Asian markets hit 40.2-percent...compared to 42.5-percent going into the U.S. for the same month.

The Forests Minister pulls out statistics from 2005 for comparison purposes, when exports to the U.S. accounted for 67.7-percent of our volume, while total volumes into China and Japan were 17-percent.

Bell says, "It is a historic time for the forest products industry, we, for decades and decades, have talked about the importance of building another dynamic market, one that can match or exceed total U.S. exports and I believe that today, we can share a statistic with you that clearly identifies we are achieving that goal and that's going to continue to grow."

He says both harvesting levels and employment are up as a result of this demand.  As of October, year-to-date harvesting is up 70-percent on the coast, and 25-percent in the interior of the province.  Employment in forestry and logging is up 33.8-percent this year.  "If you add the total forestry jobs together, we are up almost 5,000 jobs this year."

In addition, Bell points to the Pricewaterhouse Coopers report released earlier this week that identified, for the first time in a decade, every publicly reporting forests products company in B.C. was in a profitable situation.

"And that is, I think, just an incredible testament to the resilience of our forest industry," he says.  "The forest industry has rebounded -- we've gone through some of the most challenging times that we have ever seen -- it is back and we're going to continue to see it grow well into this second decade of the 21st century."


Previous Story - Next Story

Email Email | Print Print | Share on Facebook Facebook | Tweet! Twitter | Digg Digg | Del.icio.us Del.icio.us

Posted on Thursday, December 09, 2010 12:24 PM in News by Michelle Cyr-Whiting

Return to Home
NetBistro

Comments

Comment Posted by: lmorge on December 9 2010 1:25 PM
This is shortlived. The Chinese copy everything and try to make it better. Once they figure out how to get their wood closer to home it will be bye bye, not buy buy Canada.
Comment Posted by: Andyfreeze on December 9 2010 1:48 PM
Bang on Imorge!
Dealing with the asian market for anything,is an art form in itself.
If they sign a deal with you,it is because they are getting the better part of the deal...or they don't sign until they are!
And when they have figured out how to do it better and cheaper,they are gone, contract or not!
The chairman of a worldwide shipping company once told me that if you are going to try and make deals in the asian market for anything,better send your very best.
Never take anything for granted.
He said the asians are good...very good.
They will make you think you got what you wanted,when the reality is,they just cleaned your clock!
He also mentioned that they are never to be trusted in a deal.
This company covered their butt by using Chinese,Korean,and Japanese sales people exclusively, who knew the pitfalls inside and out.
It must be true,because the asians already have Pat Bell thinking we are winning.
He might not want to hold his breath on that!
Comment Posted by: hood rich on December 9 2010 2:17 PM
Isn't the whole idea of signing a trade agreement to improve your position. Pretty sure about that. I think you two need to take some intro business/economic/trade courses. That would help clarify a few things. I would start at comparative advantage.
Comment Posted by: northernjoe on December 9 2010 2:53 PM
Lot's of percentages, but few real numbers. Of course the Asian numbers will look good when the USA has all but shut down.

Perhaps Opinion250 can get some real numbers (Actual board feet shipped etc...) then it might be a good news story.

It might be anyways... but it has snowjob written all over it... and a possible election in the next year... Time to haul out the whoppers boys and girls, we gonna be needing some votes!

Comment Posted by: gus on December 9 2010 2:55 PM
Andyfreeze and Imorge. Old style thinking. Trade will eventually no longer work if it is just one way. Simple as that. China will not have anyone to sell to if they do not also buy.

Bombardier ... a special page for their Chinese connections and projects

http://cn.bombardier.com/home.htm

"Bombardier’s longstanding relationship with China began more than 50 YEARS ago and continues to strengthen today through investments in manufacturing, technology and people. A wide range of our rail transportation and aerospace products are currently in service in the Chinese market."

It's a two way street. You have to learn how to drive it properly.
Comment Posted by: pgguru on December 9 2010 3:37 PM
remember population is growing a lot of lumber producers have been completly wiped of the map,we can expect to see a big lumber shortage in the coming years.lumber is the only commodity that has not run like all the other.remember ever dog has it day.u.s was a power house in the world economy and india and china were called third world countries today china and india are the superpowers of the world.china will continue to buy are lumber its part of trade agreement,canada is a big buyer for chines parts,toy and etc.for that the chinese will continue in the forseable futures support b.cs big forestry industry
Comment Posted by: NMG on December 9 2010 4:36 PM
Very good point northernjoe. We need some real numbers to see what's happening as perhaps the volume to Asia is only growing slightly in an overall market that has seen huge reductions. Consider this example:

Say 3 years ago we shipped 10,000,000 units and 67% was to the US and 17% to China and Japan. That means that 6,700,000 would've gone to the States and 1,700,000 to China and Japan. Assume that the rest (1,600,000 units went to Europe).

What happens if we sent say 1,900,000 units to China and Japan last year (to allow for some growth), however, because of low demand in the US we only sent them 2,000,000 units and the same 1,600,000 to Europe? Eureka! Now all of a sudden, 35% of our sales are to China and Japan, 36% are to the US and 29% are to Europe. Sure looks like we are great at building the Asian market and placing less reliance on the US doesn't it? In fact, all that's occurred is that our overall volumes have dropped off a cliff while demand has remained relatively constant to Asia.

I'm saying this is what has happened, but without info on the overall volumes, the percentages are useless (and a good way to be downright misleading if one wanted to, LOL).

Also, does this good news from Pat Bell mean that we no longer have to worry about the lack of future timber supply as a result of MPB? Hip hip hooray :)
Comment Posted by: NMG on December 9 2010 4:38 PM
That second to last paragraph should read "I'm not saying this is what happened . . ."
Comment Posted by: Harbinger of Dearth on December 9 2010 8:11 PM
When looking at global forest resources, the only reason why Canada is still in the game is because Russia isn't. The simple fact that they have yet to implement a stable lumber industry has added to Canada's fortunes. Russian wood in general is better quality and has more desirable values to the European eye. China has been a constant log buyer from illegally logged timbers from Russia and this relationship will only grow once their (China and Russia) government realize the immense resources that they can share together. Canada as a foreign forestry policy should be worried about Russia.
Comment Posted by: lmorge on December 9 2010 8:12 PM
Gus, don't fus. Bombardier has had to lay off over 3000 people in their various divisions in order to stay viable.

You just don't realise that in any country there are the big business international tycoons that do not have any allegiance to any country....only the dollar and the least expensive way to line their pockets with it. Should it become financially non productive for any company chinese or otherwise..the people at the top will simply go elsewhere.
Two way street indeed. Its one way, their way, all the way.
Comment Posted by: tingbudong on December 9 2010 8:19 PM
Harbringer, I agree.

Like I've said before (on this site, and others) I have seen little, if any, decent discussion regarding the long term sustainability of Pat Bell's much vaunted China plan, especially in regards to Russia. It is as if they don't like to discuss it because they know there is absolutely nothing they can do about it, aside from taking piles of credit for a modest spike in exports (note how I did not say sales) and then moving on to other projects.

Until I read a proper official strategy (not some media sound-bite) I remain incredibly skeptical.

Positive news never hurt anyone, especially in regards to local industry. But I the BC forest industry might be on it's merry way to contracting a lethal does of the Yellow Fever if they don't get some sort of immunization.
Comment Posted by: my2bits on December 9 2010 8:42 PM
How much of this is cut lumber and how much is raw logs?
Comment Posted by: theviewuphere on December 9 2010 10:29 PM
I live in Terrace. We have a couple companies logging here and sending the whole log out by ship to China, which is a mixed blessing. It is employing quite a few people, but finishing it here would be better. That said, I am also now seeing a lot of trucks loaded with finished lumber heading to Prince Rupert. I can only presume this is for export, which is a great thing to see. Hope it continues.
Comment Posted by: gus on December 9 2010 11:18 PM
my2bits .... this will tell you the unprocessed logs sent to China in cubic metres over the last decade.

http://www.bcstats.gov.bc.ca/releases/info2010/in1044.pdf
Comment Posted by: gus on December 9 2010 11:37 PM
I agree with Harbinger. At the moment Russia is trying to tighten up on raw law exports. Don't know whether it will work. Probably does not matter. They have at least 5 times the boreal forest area Canada has.

So far they appear to be trying to comply with Sustainable Forest Management practices. If that pressure from forest products user groups is removed the competition will become interesting.

Comment Posted by: gus on December 9 2010 11:57 PM
"You just don't realise that in any country there are the big business international tycoons that do not have any allegiance to any country"

Oh, I do very much understand that. Maybe you have a suggestion how to change that.

Until you come up with a viable alternative, we have to make sure we are playing the game.

3,000 layoffs? They employ about 60,000 throughout the world. That is a 5% layoff.

Boeing laid off just under 6% of its 76,400 Washington State Commercial aircraft workforce early last year.

Do you want to talk about layoffs in the automotive industry? How many car models were discontinued? How about Forestry? Canfor? How many sawmills were shut down?
Comment Posted by: Eagleone on December 10 2010 6:30 AM
Russian forest industry doesn't employ Russians. The Russian forest industry employs slaves, and as such they will never compete with Canadian forest companies.

Most Russian logging operations in the far East are North Korean labor camps where North Korea supplies the labor and the minders to make sure they don't run... and the North Korean regime receives most of the pay for the work done... productivity isn't that great as a result. They are all to busy exploiting human labor to make any real progress as a competitor in what is now a very mechanized industry.
Comment Posted by: Eagleone on December 10 2010 6:32 AM
Interesting how Pat Bell uses last year as the basis of his employment gain stats... maybe the worst year ever for our forest industry. Compare it to when he took on the position of forest minister and you would have a very different story here.
Comment Posted by: NMG on December 10 2010 4:10 PM
Economies are not static. At some point in the future (within 5, 10 or even 20 years), I suspect Russia will start to develop their forestry industry more and if I were a betting man, I'd suggest that it will happen when we start to realize the longer term impacts of MPB and the reduced supply associated with it. If that happens and if Russia can steal "our" market share, it will be extremely difficult to get it back.

Like people have been saying for years now, we best start thinking of a plan post MPB . . .