Follow the Money: One Man's Opinion

By Ben Meisner

 -by Ben Meisner  

When you examine the settlement in the soft wood lumber dispute, the old saying applies, “follow the money”.

Canfor, the biggest player in the dispute and the company that stands to collect just under $800,000,000.00 has about fifty per cent of its operations in the central part of British Columbia, but themoney won't be spent in that area. 

Canfor has been carefully watching the beetle chew through mountain pine. They are fully aware that in the next seven to ten years the lumber industry will hit the wall in a large part of central and northern BC.  They know they will have to shrink their operations into perhaps two super mills, one already in operation in Houston, BC and the other at Plateau Mills in the Vanderhoof region.

West Fraser (who also is poised to receive a large pocket full of money) understands only too well that its operations, and in particular the Quesnel region, face imminent moth-balling within the next seven to ten as the timber supply dries up by as much as 75% .

So follow the money.  

Canfor likes the idea of its holdings in the southern US.  Southwest has afforded them the opportunity to expand that European lumber market and that of the Russians without facing any duties in the foreseeable future. So they will be out to buy some more of the US lumber producers, especially in the south, stay tuned for that announcement.

Conversely they have already announced they are setting up shop in China and Japan.  India, with its growing middle class (as pointed out by Canfor Board Chairman Peter Bentley) is yet another market in which lumber from Russia’s vast supply could be cut and hauled overland for sale in India. 

The only hope for the local economy is the small mill operators of the region like, Dunkley, Winton and Carrier.  Their take of the spoils is more in the ball park of  $ 20,000,000.00 so that money is likely to get soaked up in the local economy and in seeking new markets in Japan, Korea and China .

The USA really doesn’t need to worry about the little fellow up here in Canada, the big guys have already begun to stake out their future markets in various countries and the US  isn’t one of them.

I’m Meisner and that is one man's opinion.

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