Vol.3, Issue 4 · Dec. 2007

I find it distressing that it's become fashionable once again for some ill-informed critics and special interest groups to start kicking at the coastal forest industry. The latest change that some critics are opposing concerns private land that the provincial government has allowed some companies to withdraw from their Tree Farm Licences.

Given the real challenges facing the industry, the critics timing couldn't be worse. These groups seem to conveniently forget that the coastal forest industry has faced 20 years of continuous change in forest policy, unilaterally imposed upon us by successive governments, which fundamentally changed the way forest companies on the coast conduct business. Among these dramatic changes were thousands of hectares of land withdrawn for park creation, tenure take backs, increased stumpage payments and the implementation of stringent forest practices legislation. Through it all, the coastal industry has been steadfast, finding innovative ways to adapt, and continues to contribute $2 billion annually to the B.C. economy, over $400 million to the Crown and employs more than 12,000 people.

Now with an over inflated Canadian dollar and a collapse of our major markets in the U.S. and Japan, things are even tougher. These private lands represent a very small percentage of the companies' holdings and their removal from the TFLs provides the flexibility needed to sell those lands that have a higher and better use while sustaining forestry operations. Remember these are privately owned lands, not Crown forest, and we are talking about land that most critics and environmentalists don't want logged anyway. It simply doesn't make sense to prevent a company from making changes that will sustain its economic viability, retain jobs and support rural communities.

The forest industry has done its part responding to environmental and societal concerns about forest stewardship, now it is important to let the companies get on with business. Coastal forest companies will continue to adapt to changing conditions as they always have, supporting coastal communities from Port Hardy to Victoria. All they ask is that the rules be fair and stable in support of a sustainable industry, not drive the companies out of business. If successful, these critic's misguided efforts will cause more mill closures, fewer jobs and economic ruin in many rural communities.

Having recently returned from Asia where I witnessed new opportunities developing for coastal products, it's disheartening to spend time and energy dealing with these critics instead of growing our markets. Remember, if our industry were to collapse under the conflicting pressures, our products would be replaced by other emerging markets with much less desirable forest practices and environmentally damaging footprints, who'd be quick to take over in the Asia Pacific region - hardly an optimal solution in a climate change world.

Western Forest Products applied new technology at its Port Alberni Division sawmill to seize opportunity in the Japanese market for dried hemlock squares, turning the once flagging mill's fortunes around.
Released in late October, the Coastal Action Plan provides $991,500 to FP Innovations to apply innovative science and technology to expand economic opportunities for the B.C. coastal forest sector. The plan, formed through a collaborative process with government and key stakeholders, provides research and development opportunities to maximize returns from hemlock, which is of particular interest to Coast Forest.

"There is no quick fix for the challenges facing the coastal forest sector, but I believe the actions outlined in this plan will help us regain our competitive edge," says Rick Jeffery, President and CEO of Coast Forest.
FII's Lisa Dou in China promotes the benefits of B.C. wood to a group of professionals attending the demonstration project's landscaping seminar in Guangzhou
With umbrellas in hand, landscaping seminar attendees gather on deck made of coastal balsam, which is resistant to southern China's wet climate
West Fraser's China representative Eric Zhang and Construction Supervisor Joel Neufeld analyze the ACQ penetration in pressure treated wood

It's not what comes to mind initially when one thinks of China's rapid economic growth and concrete urban sprawl, but Guangzhou is showcasing one of the most promising landscaping opportunities for B.C. forest products in its gardens!

Surprisingly, Guangzhou, Guangdong, a city of approximately 13 million people, is known as the Garden Capital of China with nearly 20 major parks. And Zhujiang Park, scheduled to open in late December, features the first landscaping demonstration project in China made up entirely of pressure treated outdoor wood products from B.C.

Treated wood products have shown rapid growth in China since their introduction in 2000. Greening initiatives linked with the 2008 Olympics in Beijing, the 2010 Expo and 2010 Asian Games have spurred massive landscaping projects all over China. According to the goals set by the State Council directive, treated wood will account for 5 per cent of China's industry wood consumption by 2010, which means an annual demand of over 3 million cubic metres of treated wood products. Assuming outdoor applications are 50 per cent of the market, this translates into a demand of approximately 1.5 million cubic metres, worth as much as $1.5 billion annually by 2010.

"Guangzhou is just the beginning," says Coast Forest's Rick Jeffery, who is also Chair of Canada Wood, and toured the site as it was nearing completion in November. "There are more major-scale landscape projects planned for the north of China that will make use of coastal hemlock, but Guangzhou's climate in the south is more suited to balsam. Cedar, of course, is being used everywhere."

Coastal forest products producers and distributors, like the Teal Jones Group and Taiga Building Products, view China's growth in landscaping as a potential niche market, particularly for pressure treated coastal balsam, Western Red Cedar and yellow cedar. All are examples of outdoor wood products that are perfectly suited to China's climate because they are resistant to moisture and insects - making them ideal for use in a wide range of landscaping applications, including walkways, bridges, trellises and benches.

Teal Jones' Vice President of Sales and Marketing, Mike Friesen, says the company jumped at the chance to provide a special order of balsam for the project, which required a sort that isn't common practice on the coast. Usually hemlock and balsam are mixed in a log boom, and then in the mill the two species are sawn together and sold as hem-fir. But balsam's superior absorption of the chemicals used in pressure treated wood improves its resistance to moisture, decay and insect attack, which is critically important in Guangzhou's southern location where these conditions are severe.

Most wood looks good initially, Friesen explains, but if it isn't treated properly, it won't stand up. "They needed a super treated wood," he says. "So we made a special effort to put really nice looking wood into that marketplace. It cost us more to produce because of the way it was sorted, but we're hoping for a longer term payoff."

John Gillis of Taiga Building Products agrees that the market for outdoor landscaping products is growing quickly in China, so it was very important for Taiga to get in on the ground floor. Taiga already does a lot of business in China, supplying lumber that is either used as is, like the treated products, or is further remanufactured there for either the Chinese market or for export again.

Taiga Building Products is the largest distributor of building materials in Canada, with three treating facilities across the country. Langley, B.C. is home to the facility where the Guangzhou balsam was pressure treated with an environmentally advanced non-arsenic and non-chromium ACQ preservative system, a copper-based certified chemical that preserves wood for outdoor applications and is safer but also more expensive than previous chemicals used to pressure treat wood.

"For us as a company China is a very strategic growth market," Gillis points out. "Treating is one of our core strengths, so it makes sense to us to be a part of this project because it is a large market and has huge market potential for treated products."


LUMBER BUSINESS (CONT'D FROM PAGE 2)The demonstration project will not only introduce B.C. products to China but will also serve as a platform for transferring technology and experience to park officials for use in future projects. Coast Forest is helping China move toward more environmentally friendly methods for pressure treated products by working with its government on codes and standards that will hopefully lead to the adoption of the ACQ preservative system.

"This project was led by Forestry Innovation Investment's Shanghai office, working in partnership with Guangdong's Garden Bureau, the Canada Wood Group and FP Innovations," says Jeffery. "Its success drew on Canada's and British Columbia's technical experience with wood materials and construction, combining them with China's garden design expertise to create this unique, one-of-a-kind landscape environment."

One of the project's main attractions, this 7,000 sq. ft. Interpretive Centre will be used much like a community centre and is constructed entirely of B.C. wood


SAFETY PROGRESSWith the coastal labour dispute now behind us, many companies and logging contractors are scrambling to put logs in the water before the snow flies. They're also putting the required safety program components in place, working towards SAFE Companies certification in an unprecedented difficult economic climate, brought on in part by low lumber prices and a soaring Canadian dollar.

Two years ago, on November 19, 2005, the forest sector suffered its fortieth tragic fatality of that year, a faller on Vancouver Island. At that time a fatality a week was hitting the newspapers and every part of our province was calling for action to stop the carnage. Since then, the industry has responded to the safety challenge, despite increasing economic hardship. That's because safety is paramount to the success of all companies, big or small.

Increased safety awareness and safety program implementation has started to work its way through the sector, however, there's still a long way to go to make safety the overriding priority in every single operation up and down the coast.

Currently, 255 firms are certified under the SAFE Companies program: 119 large ones and 136 small. Unfortunately, many smaller firms are struggling to implement even the most basic safety programs needed to meet this standard. In some cases, they've never had a safety program or in the past have piggybacked on the licensees' or larger contractors' programs.

SAFETY ADVOCATE OPEN HOUSESThe BC Forest Safety Council has sponsored a series of Safety Advocate Open Houses across the province, hosted by local Safety Advocates. These sessions provide a relaxed environment to learn about SAFE Companies certification and the requirements of the SEBASE audit, offering tips and tools designed to facilitate successful submission of the small employer audits. They've been well received with almost 100 participants attending five different sessions, and further ones are in the planning stages.

As the holiday season and New Year approach there's one thought that might guide us to make safety stick. When you do a safety check perform a "gut check" before you do a job or ask someone else to do it. Ask yourself, would you send your own son or daughter to do that job? Let the answer guide you from here on in. Make safety an overriding priority in 2008 and have a SAFE New Year!

65TH ANNUAL TLA CONVENTION & EXPO JANUARY 15-18, 2008Coast Forest Products Association President & CEO Rick Jeffery will be participating with a panel of experts sharing their perspectives on the industry's challenging path to global competitiveness. Other panelists include Forests and Range Minister Rich Coleman and BC Forest Safety Ombudsman Roger Harris. The panel takes place Thursday, January 17th from 1:00 - 2:30 pm in the ballrooms at the Vancouver Convention & Exhibition Centre. Tickets: $50 each. For more information visit www.tla.ca or contact Helena Jehnichen at 604-684-7134.
Coast Forest's Rick Jeffery (centre) visits Guangzhou Demonstration Project with Joel Neufeld, Construction Supervisor (left), Xu XinJiang, Project Assistant (right) and Mike Hogan, FII China (front)

Coast Forest represents forest and paper companies in coastal British Columbia engaged in the harvesting and manufacturing of primary and added value forest products, and pulp and paper products. Together, these companies manufacture 95% of the lumber produced on the coast, 70% of the pulp and paper production and are responsible for 70% of the total harvest. The Association works to ensure that the five coastal species and their product lines have fair access to the global marketplace. Committed to providing leadership to create a thriving forest industry, Coast Forest facilitates cooperation between stakeholders and government on behalf of its member companies.

Coast Forest Products Association
1200-1090 W. Pender St.
Vancouver, BC
V6E 2N7
www.coastforest.org
e-mail: info@coastforest.org
Tel: 604.891.1237
Fax: 604.682.8641



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