Carrier Purchase Just the Beginning: One Man's Opinion

By Ben Meisner

The end is not in sight in the buy out of mills in the region. 

Smaller players in the lumber industry are looking around and see they have two options following the lumber tariff deal with the US -

-pay some hefty taxes on the money they are about to receive, or

-go shoppping.

Carrier Lumber took the latter this week when it purchased North West Specialty Lumber in Valemount. It is in this level of the lumber industry where the most investment is likely to take place.  Smaller mills are looking to shore up their forest tenure for the future and they see their future in this part of the country.

By contrast, we have been watching the largest player in the game, Canfor, as it  looks over its options on the international scene. That huge supply of Russian timber is just waiting for someone with enough jam to take a shot at the market.  Contrary to what we might like to believe, the Chinese would like to export lumber into the US, Europe and indeed Canada and there is a ready supply at hand on the Russian front.

Canfor has been sniffing around with the hope it can hitch a wagon to that Chinese dream, even a small piece of the action would put Canfor in a top spot not only on the Chinese domestic market but on the world stage as well with wood products that will make the countervailing duties against Canada seem picayune at best. 

Add that to the wedge that is being built in the southern US with wood imported from the Scandinavian countries and  funneled into the US without those duties attached and Canfor could become a much larger player not only in Canada but on the world stage.

The purchase of New South by Canfor was just a foot in the door.  When the cheque arrives from the USA returning the $700 million that Canfor stands to receive from those duties and suddenly some of those southern USA mills should not feel too comfortable because Canfor may come calling. By delving into the Chinese, Russian and European market in the manner that it has, the US lumber industry along with Canada will be receiving it with both barrels.

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

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