Forestry Future Needs Transportation Break

Thursday, April 12, 2007 09:58 AM

The B.C. Interior forest industry has a bright future, although it won’t be one without challenges. That was the message delivered during the first panel discussion at the Council of Forest Industries Conference in Prince George.

KPMG’s John Desjardin told the Council of Forest Industry Conference in Prince George this morning that with housing starts down in the United States, the impact of a higher valued Canadian dollar an oversupply of lumber, the challenges are there, but there are opportunities. He says there are several avenues that must be explored including taking advantage of the opportunities presented by the growing economy of China and the potential of increasing activity in Russia.

B.C. is in a very competitive position says Russ Taylor, the President of the International Wood Market Groups. “B.C has some of the lowest log costs, the sawmill prices are below some of the U.S. and European costs, and our prices are very good.” He says the difficult areas are taxes and transportation.

Those comments were reinforced by Hank Ketcham, the President and CEO of West Fraser Timber. He says while the industry has become more productive, getting more out of each log even though the logs are smaller, the costs they can’t control are transportation and taxes. “The Province controls 100% of the supply and has a responsibility to ensure a safe, secure supply of logs” says Ketcham. He also says the province must also put a realistic price to mountain pine beetle logs that truly reflect the value of the log Ketcham says the Mountain pine beetle logs “can no longer be economically salvaged given today’s costs.”

Ketcham also says the transportation issue is one of concern. He says there are not enough cars, crews sit idle, shipments are missed or late. Ketcham says the railway should operate as if its customers had other options “We don’t want to regulate the transportation industry, but we do need some leverage when dealing with the railroad.”

Despite the challenges, Ketcham is optimistic “This is a very dark period in the history of our industries however, after 50 years we are still showing the same practical can-do attitude that has pushed our industry forward.” That’s a proven track record says Ketcham who is confident the industry will rise above the current challenges.

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Posted on Thursday, April 12, 2007 09:58 AM in News by 250 News

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Comments

Posted by: REALIST on April 12 2007 10:37 AM

Gee now industry is complaining about the lack of rail compitition. Just one more indicator as to what the real motives were for stealing and selling our property. Thanks yet again Gordo.

Posted by: diplomat on April 12 2007 11:18 AM

Despite the challenges, Ketcham is optimistic �This is a very dark period in the history of our industries however, after 50 years we are still showing the same practical can-do attitude that has pushed our industry forward.�

Sigh of relief! It looks as if the enormous beetle kill doesn't seem to be much of an issue with these people as far as the always bright future of the B.C. Interior forest industry is concerned!

They are the experts, so the message to us ordinary blokes is not to worry needlessly!

Posted by: Andyfreeze on April 12 2007 11:44 AM

I would like to be optimistic too diplomat, and I do think that we will find a way through this beetle kill issue even if things are not quite the same as they used to be.
But,I also think that we should be careful with any statements made by the big forest companies.I can't help but think they will be trying to downplay certian aspects of the bug kill situation down the road to avoid panic within the industry and maintain order as best they can within the marketplace.
This IS going to hurt many, and I really don't think there is anyway around it.
Hopefully,I will be dead wrong!

Posted by: Chadermando on April 12 2007 11:59 AM

LOL the rail car issue and competition. Didn't these same guys sing off on the BC Rail deal?

I'll say it again.

BC should be an open port status as it was prior to joining confederation. This means the public should own all rail infrastructure as an essentail infrastructure to our provinces future, and then any rail operator who wishes to use that infrastrucutre providing competition of services would be free to do so. This would require the provicne to set up a company that maintains the rail lines in BC, and a cost allocation for rail service providers per kilomtre of ton track they utilize.

Its a safety issue, its an environmental issue, and its an issue of open competition providing the services (cars) that our industry requires to compete on a global stage. It should have been done rather than selling the rights to BC Rail for the next thousand years.

IMO the BC Rail insider influence peddling case before the courts should justify undoing the treason that was done to our province and setting this ship straight again.

Posted by: giterdun on April 12 2007 1:42 PM

REALIST & CHAD...

THE RAILROAD HAS BEEN SOLD. RIGHT WRONG OR INDIFFERENT. QUIT BEATING A DEAD HORSE. LETS WORK ON SOLUTIONS NOT DWELLING ON THE PAST.

Posted by: Chadermando on April 12 2007 1:48 PM

giterdung, stop yelling and read the last paragraph.

Posted by: REALIST on April 12 2007 5:41 PM

YES, IT MAKES SENSE TO IGNORE THE MISTAKES MADE. LETS JUST FORGET THAT THEY STOLE OUR RAILROAD AND SOLD IT. WHO SAID THAT THOSE WHO IGNORE HISTORY ARE PRONE TO REPEAT THEIR MISTAKES? I FOR ONE DO NOT BELEIVE IN FORGETING MISTAKES MADE AS IT TENDS TO MAKE THOSE WHO DO LOOK LIKE IDIOTS, BUT THEN I GUESS THAT IS BEST LEFT UP TO THE IDIOTS. SORRY ABOUT THE CAPS BUT I THOUGHT IT MIGHT LOOK MORE DRAMATIC BUT, INSTEAD IT JUST LOOKS LIKE I WAS TRYING TO MAKE MY POINT LOOK LIKE IT HAD A PURPOSE. SORRY FOR THE INCOVIENCE.

Posted by: Chester on April 12 2007 8:48 PM

What's done is done and we can't change the past. But, we can focus more on looking out of the front windshield rather than the rear view mirror. Here we are now. What is the best course of action? What is the vision? What do we need to do? Let's move ahead and create a vision for a better tomorrow.

Yes, there are challenges. But,also opportunities. Let's remain optimistic, positive and forward thinking. Chester

Posted by: Palopu on April 12 2007 9:05 PM

There is a lot of discussion on these posts in regards to Rail Transportation Rates, however there is one thing that is being overlooked. None of you know what the Rail Rates are, nor do you know if they are competitive with other areas of the Country or how they stack up against transportation costs in other Countries.

Lower rail rates mean bigger profits for lumber companies. They have been complaining about rail rates since the early 1950's and will continue to do so into the future.

Why dont you ask Ketchum how they can continue to operate the mills when they are selling lumber for $280.00 per 1000 FBM, and if they can operate at that price then, when they are getting $480.00 to $500.00 per 1000 FBM they must be making a killing.

The Forest Companies in this area were asleep at the switch when they allowed CN Rail to purchase the BC Rail. Anyone with a modicum of transportation knowledge knows that this Railway should have been sold to CP Rail, or to the Burlington Northern Rail. This would have created a competitive situation and as a result the rates would remain low.

In the old days the Forest Companies, and the Pulp Mills and other people who were dependent on competitive rates would have raised Hell with both the Provincial and Federal Governments and this sale would have never taken place. As it is to-day most Companies are run by over educated incompetents who have no idea whats going on around them.

This type of break down was predicted a long time ago by those who know that in order to run a successful business you have to have good long term employees, educated and EXPERIENCED employees, who stay with a Company and have the Companys interests as their interests. This type of employee is **Dead** killed off by the brain trust that took over business in the last few decades and have only concerns for the bottom line. "Which at the end of the day will get you the bottom rung"

Posted by: owl on April 12 2007 11:19 PM

�He says there are several avenues that must be explored including TAKING ADVANTAGE OF THE OPPORTUNITIES PRESENTED BY THE growing economy of China and the POTENTIAL OF INCREASING ACTIVITY IN RUSSIA.�

How can those living in PG take advantage of increasing activity in Russia? They have far more boreal forests than we have. So, Canfor can take advantage of that by setting up some plants in the Far East of Russia, of instance. That is not going to help us. In fact, they could sell product from Russia to their traditional clients and shutting down some operations in Canada �..

Posted by: owl on April 12 2007 11:35 PM

"we do need some leverage when dealing with the railroad."

There is a single network which is used to push through goods .....

sound familiar???? ... telephone cables ... hydro cables .... cablevision cables ... pipelines ... even phone numbers "owned by companies" as opposed to being "owned by individuals"

those systems are all being de-monopolized so that others have an equal chance to access the market.

So why can rail not be handled in a similar fashion? I thought it was with respect to the passenger provider between Jasper and Vancouver via Whistler and Quesnel.

Posted by: Chadermando on April 13 2007 9:09 PM

LOL REALIST good one....

Posted by: Chadermando on April 13 2007 9:10 PM

Palopu that makes sense to me.