Monday, July 5, 2010
Domtar sale of forest products business a done deal; update on fire at Tembec's Chetwynd pulp mill
The Domtar sale of its forest products business to EACOM Timber is now officially a done deal, making EACOM a much bigger player on the lumber side of the business.
The Domtar sale of its forest products business to EACOM Timber is now officially a done deal, making EACOM a much bigger player on the lumber side of the business.
As previously announced, EACOM acquired the business for $80 million plus working capital of $46.5 million. Domtar received 19% of the proceeds in shares of EACOM, giving Domtar an ownership interest of approximately 11.74% interest in EACOM.
The transaction includes five operating sawmills: Timmins, Nairn Centre and Gogama in Ontario, and Val-d'Or and Matagami in Quebec; as well as two non-operating sawmills: Ear Falls in Ontario and Ste-Marie in Quebec. The sawmills have approximately 3.5 million cubic metres of annual harvesting rights and a production capacity of close to 900 million board feet. Also included in the transaction is the Sullivan remanufacturing facility in Quebec and Domtar's interests in two investments: Anthony-Domtar Inc. and Elk Lake Planing Mill Limited.
On another note, Tembec has provided an update regarding a fire at the company’s high yield pulp mill in Chetwynd, B.C. The fire started on Wednesday June 30, in the late afternoon. Emergency procedures were followed, and thankfully there were no injuries to any employees.
True to the community spirit of small towns, seems like everyone was pitching to fight the fire. In addition to the Chetwynd Volunteer Fire Brigade and employees, fire fighting support from the Fort St. John and Dawson Creek fire departments was received, as well as from the BC Ministry of Forests. Tembec wanted to acknowledge the timely and diligent response of these organizations with gratitude.
The fire and related damage is primarily concentrated in the log storage and chip pile area of the mill site. There was also some damage to the scales, chip receiving and unloading equipment, chip conveyors and related electrical services.
Assessments by mill personnel and outside resources have indicated that damage to the pulp production area of the mill is relatively minor. In terms of direct loss, it is estimated that roughly 40,000 cubic metres of fibre (chips and logs) were destroyed. While the chip and log piles continue to smolder, the situation is considered well under control.
Site personnel and outside resources are already beginning their work at the mill to address electrical and mechanical repairs, with procurement and delivery of necessary materials and equipment already well underway. Current estimates are that the mill will be out of service for between 14 and 18 days from the date of the fire, resulting in lost production of approximately 10,000 tonnes.
Wednesday, November 25, 2009
A sold-out Wood Residue Conference
Despite challenging times in the forest industry, the 8th Biennial Wood Residue, Forest-to-Fuel Conference held in October proved to be a tremendous success, with a sold-out Suppliers Showcase and capacity attendance.
While there are signs of improvement in the general economy, the forest products industry is still facing difficult business conditions. But that likely explains why perhaps more than ever, forest-related companies want to maximize the utilization of residual wood.
Speakers at the well-attended conference, which was put on by Logging and Sawmilling Journal and held at the Sheraton Vancouver Airport Hotel, talked about practical strategies, and said it was important to manage residual wood as a true industry resource.
This year’s conference provided examples of successful wood energy projects, the nuts and bolts of why projects work, and solid business strategies.
“With this being the 8th Wood Residue Conference, we were able to build on the success of our past conferences,” said Rob Stanhope, co-chair of the conference and publisher of Logging and Sawmilling Journal. “We’re very pleased that the conference was sold out both in terms of attendance and the Suppliers’ Showcase, which highlighted the technology and products of more than 30 companies involved in the residual wood business.”
Logging and Sawmilling Journal has been closely involved with the residual wood sector, though extensive coverage of residual wood projects and developments in the magazine. Early on, Logging and Sawmilling Journal recognized the importance of residual wood to the industry, and has put on the residual wood conference every two years since 1995.
The conference reviewed the full spectrum of residual wood opportunities, with a very strong line-up of speakers.
One of the overall goals for the conference was to highlight how the industry can achieve better utilization of the wood resource—to deliver revenue from residual wood.
Conference speakers said there are still significant business opportunities with the huge residual wood resource available in B.C. and Canada.
With energy prices edging up again, and increasing concerns about climate change, conference attendees heard that there is greater interest than ever in the use of residual wood and biomass as a fuel.
“The residual wood that is generated by forest industry operations across North America is steadily becoming a more valuable resource for pellet production and energy generation,” said Brad Bennett, vice-president of operations for Pacific BioEnergy Corp, and the other co-chair of the conference.
“Utilizing wood more fully for fuel and energy generation is emerging as an important part of generating additional revenues for the forest industry, and supports the dynamic and growing wood-to-energy sector of the industry.” Pacific BioEnergy Corporation manufactures, markets, and distributes wood pellet biomass energy. The company has a wood pellet manufacturing plant in Prince George, B.C.
B.C. Forests Minister Pat Bell spoke at the conference, and reinforced the provincial government’s commitment to clean energy, and that use of biomass as a fuel is part of a clean energy solution.
Several conference speakers noted the growth of wood pellet production, and what looks to be a very bright future for wood pellet demand. Global demand for wood pellets is expected to grow from 10.8 million tonnes to 22.3 million tonnes over the next five years, noted John Swaan, president of PFIT Consulting. The driving forces of that growth include concern about climate change in Europe and the move to clean energy in the U.S.
Michael Weedon, Executive Director of the B.C. Bioenergy Network, spoke about the role of the organization and its goal of maximizing the value of B.C.’s biomass resources, and developing and growing a world-class bioenergy industry in B.C. This would be achieved in part by developing mission-driven research, development and demonstration projects and levering funding to support B.C.-focused bioenergy technology and applications.
The B.C. Bioenergy Network was a gold sponsor of the Residual Wood Conference. Alterna Energy Inc was a silver sponsor, and Stolberg Engineering and Pacific Bioenergy were bronze sponsors. Other sponsors were BC Hydro, Bliss Industries and Lignol Energy Corporation.
For those who were unable to attend the conference, the proceedings of the Wood Residue, Forest-to-Fuel Conference are available on flash drive for $100 plus shipping from the Logging and Sawmilling Journal office, at 604 990-9970.
The next Residual Wood Conference is scheduled for October 2011.
While there are signs of improvement in the general economy, the forest products industry is still facing difficult business conditions. But that likely explains why perhaps more than ever, forest-related companies want to maximize the utilization of residual wood.
Speakers at the well-attended conference, which was put on by Logging and Sawmilling Journal and held at the Sheraton Vancouver Airport Hotel, talked about practical strategies, and said it was important to manage residual wood as a true industry resource.
This year’s conference provided examples of successful wood energy projects, the nuts and bolts of why projects work, and solid business strategies.
“With this being the 8th Wood Residue Conference, we were able to build on the success of our past conferences,” said Rob Stanhope, co-chair of the conference and publisher of Logging and Sawmilling Journal. “We’re very pleased that the conference was sold out both in terms of attendance and the Suppliers’ Showcase, which highlighted the technology and products of more than 30 companies involved in the residual wood business.”
Logging and Sawmilling Journal has been closely involved with the residual wood sector, though extensive coverage of residual wood projects and developments in the magazine. Early on, Logging and Sawmilling Journal recognized the importance of residual wood to the industry, and has put on the residual wood conference every two years since 1995.
The conference reviewed the full spectrum of residual wood opportunities, with a very strong line-up of speakers.
One of the overall goals for the conference was to highlight how the industry can achieve better utilization of the wood resource—to deliver revenue from residual wood.
Conference speakers said there are still significant business opportunities with the huge residual wood resource available in B.C. and Canada.
With energy prices edging up again, and increasing concerns about climate change, conference attendees heard that there is greater interest than ever in the use of residual wood and biomass as a fuel.
“The residual wood that is generated by forest industry operations across North America is steadily becoming a more valuable resource for pellet production and energy generation,” said Brad Bennett, vice-president of operations for Pacific BioEnergy Corp, and the other co-chair of the conference.
“Utilizing wood more fully for fuel and energy generation is emerging as an important part of generating additional revenues for the forest industry, and supports the dynamic and growing wood-to-energy sector of the industry.” Pacific BioEnergy Corporation manufactures, markets, and distributes wood pellet biomass energy. The company has a wood pellet manufacturing plant in Prince George, B.C.
B.C. Forests Minister Pat Bell spoke at the conference, and reinforced the provincial government’s commitment to clean energy, and that use of biomass as a fuel is part of a clean energy solution.
Several conference speakers noted the growth of wood pellet production, and what looks to be a very bright future for wood pellet demand. Global demand for wood pellets is expected to grow from 10.8 million tonnes to 22.3 million tonnes over the next five years, noted John Swaan, president of PFIT Consulting. The driving forces of that growth include concern about climate change in Europe and the move to clean energy in the U.S.
Michael Weedon, Executive Director of the B.C. Bioenergy Network, spoke about the role of the organization and its goal of maximizing the value of B.C.’s biomass resources, and developing and growing a world-class bioenergy industry in B.C. This would be achieved in part by developing mission-driven research, development and demonstration projects and levering funding to support B.C.-focused bioenergy technology and applications.
The B.C. Bioenergy Network was a gold sponsor of the Residual Wood Conference. Alterna Energy Inc was a silver sponsor, and Stolberg Engineering and Pacific Bioenergy were bronze sponsors. Other sponsors were BC Hydro, Bliss Industries and Lignol Energy Corporation.
For those who were unable to attend the conference, the proceedings of the Wood Residue, Forest-to-Fuel Conference are available on flash drive for $100 plus shipping from the Logging and Sawmilling Journal office, at 604 990-9970.
The next Residual Wood Conference is scheduled for October 2011.
Tuesday, August 25, 2009
Some promising news on the U.S. housing front
After being in almost a free fall for the last several years, housing sales in the United States are on the upswing.
While things on the housing front are a long ways from recovery, this is still positive news for the Canadian forest industry and Canadian sawmills, who supply a good portion of American homebuilders with dimensional lumber.
The U.S. National Association of Realtors reports that for the first time in five years, existing-home sales have increased for four months in a row.
Existing home sales—including single-family, townhomes, condominiums and co-ops—rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008.
The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
Lawrence Yun, NAR’s chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said.
Significantly, the monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.
“In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.
Interesting that a lack of inventory is now becoming a problem.
Clearly, the government incentives introduced by President Barack Obama are giving the housing market some traction.
The home building industry—and the Canadian forest industry—are not out of the woods yet by a long shot, but news like this is certainly positive when the industry has been hit by story after story of mill closures, and drops in lumber demand.
After being in almost a free fall for the last several years, housing sales in the United States are on the upswing.
While things on the housing front are a long ways from recovery, this is still positive news for the Canadian forest industry and Canadian sawmills, who supply a good portion of American homebuilders with dimensional lumber.
The U.S. National Association of Realtors reports that for the first time in five years, existing-home sales have increased for four months in a row.
Existing home sales—including single-family, townhomes, condominiums and co-ops—rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008.
The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
Lawrence Yun, NAR’s chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said.
Significantly, the monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.
“In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.
Interesting that a lack of inventory is now becoming a problem.
Clearly, the government incentives introduced by President Barack Obama are giving the housing market some traction.
The home building industry—and the Canadian forest industry—are not out of the woods yet by a long shot, but news like this is certainly positive when the industry has been hit by story after story of mill closures, and drops in lumber demand.
Wednesday, June 10, 2009
Let’s get some action on the black liquor credit
The gears appear to be grinding ever-so-slowly in Ottawa on action to counter the situation with U.S. pulp mills receiving a windfall tax credit on their use of black liquor to generate energy.
Some estimates say the tax credit/subsidy gives U.S. producers a $200 a tonne advantage vs. Canadian producers—which is one heck of an advantage when pulp prices are bumping along.
The situation has spurred protests from—in addition to Canada—Europe, Brazil and Chile. The subsidy is said to be worth up to $7 billion to U.S. producers
While this may not have a direct immediate impact on logging and sawmill operations, anything that makes the pulp sector less competitive does more than just trickle down to the sawmills—which supply pulp mills with chips—and the logging in the bush, the source of all wood fibre for the industry. It has the potential to have more of a cascade effect, than a trickle.
The Canadian government is said to be working on a $1 billion package for pulp mills, crafting it carefully so it will not run afoul of the Softwood Lumber Agreement with the U.S.
But clearly the longer it takes to bring something forward to help the industry, the more damage is done.
The gears appear to be grinding ever-so-slowly in Ottawa on action to counter the situation with U.S. pulp mills receiving a windfall tax credit on their use of black liquor to generate energy.
Some estimates say the tax credit/subsidy gives U.S. producers a $200 a tonne advantage vs. Canadian producers—which is one heck of an advantage when pulp prices are bumping along.
The situation has spurred protests from—in addition to Canada—Europe, Brazil and Chile. The subsidy is said to be worth up to $7 billion to U.S. producers
While this may not have a direct immediate impact on logging and sawmill operations, anything that makes the pulp sector less competitive does more than just trickle down to the sawmills—which supply pulp mills with chips—and the logging in the bush, the source of all wood fibre for the industry. It has the potential to have more of a cascade effect, than a trickle.
The Canadian government is said to be working on a $1 billion package for pulp mills, crafting it carefully so it will not run afoul of the Softwood Lumber Agreement with the U.S.
But clearly the longer it takes to bring something forward to help the industry, the more damage is done.
Thursday, May 21, 2009
Confused about what’s going on in the economy these days? You’ve got lots of company. Case in point: there are some mixed signals out there in terms of a recovery in the all important U.S. housing market, the main market for Canadian lumber.
April U.S. housing starts numbers are in, and there was a plunge in condominium and apartment buildings starts—but there was also the second straight gain in starts on single-family dwellings.
At the PricewaterhouseCoopers forest industry conference, PwC’s Craig Campbell, cut to the chase: “Why is it so tough to make a buck these days in the industry? Well, the challenge is that the economic influencers of forest and paper operations haven’t changed through the years and the expenditures required to build mills and keep them running are huge. Furthermore, we’ve been dealing with over-supply for many years now, and the current economic conditions aren’t helping. Add in non-differentiated products, and you have the makings for real challenges to make a decent return.”
Last year lumber prices were at 25 year lows. However, in Q4 of 2008 prices were even lower at US$181 per mfbm versus US$225 per mfbm in the same quarter of 2007.
Thursday, April 23, 2009
West Fraser is now number one!
First off, welcome to my blog for Logging and Sawmilling Journal and the new website for Logging and Sawmilling Journal.
The blog is a new feature for our website, but I hope to be able to bring news and information about what’s going on in the Canadian forest industry to Logging and Sawmilling Journal readers and website visitors.
A recent newspaper headline tells the story for the industry these days: The Canadian forest industry continues to be hit with trying times. Now there is an understatement. Temporary mill closures continue to be announced across the country. That said, there is no doubt the forest industry is going to survive, though it will be in a different form.
One of the changes we’ve seen in the industry is in the title of Canada’s top lumber producer. The full details will be in a story soon to be posted to www.forestnet.com (and running in the April issue of Logging and Sawmilling Journal) but West Fraser has now topped Canfor as the top lumber producer in Canada, and Tolko has taken the number three position, nudging out AbitibiBowater.
The annual listing of the top Canadian lumber producers—done by Russ Taylor and his very capable group of folks at International WOOD MARKETS Group Inc., Canada’s largest wood products consulting firm (www.woodmarkets.com)—clearly shows the severe impact of drastically reduced softwood lumber demand on 2008 company production volumes.
With that decrease have come changes in the rankings of the top lumber producing companies in Canada, with West Fraser now on top, replacing Canfor.
The survey shows total Canadian softwood lumber production dropped from 29.95 billion board feet in 2007 to 23.8 billion board feet in 2008 (down 20.5 per cent) and has decreased by over 32 per cent from the peak Canadian lumber production of 35.1 billion board feet in 2004.
Due to considerably less scheduled downtime and lower operating costs in 2008, the survey notes that West Fraser was Canada’s largest softwood lumber producer in Canada at 3.4 billion board feet (3.5 billion board feet in 2007) compared to Canfor at 3.3 billion board feet (4.1 billion board feet in 2007). This is significant—it marks the first time since 1999 that Canfor has not been #1 in Canada. Tolko jumped to the #3 position as curtailments caused output at AbitibiBowater to drop by 36 per cent in 2008.
Watch the www.forestnet.com web site for the April issue of Logging and Sawmilling Journal and the full details on Canada’s Top Lumber Producers.
If you haven’t already, you may want to add www.forestnet.com to your favourite websites on your browser, for easy reference.
And watch this blog space for further forest industry news and views!
Paul MacDonald
Editor
First off, welcome to my blog for Logging and Sawmilling Journal and the new website for Logging and Sawmilling Journal.
The blog is a new feature for our website, but I hope to be able to bring news and information about what’s going on in the Canadian forest industry to Logging and Sawmilling Journal readers and website visitors.
A recent newspaper headline tells the story for the industry these days: The Canadian forest industry continues to be hit with trying times. Now there is an understatement. Temporary mill closures continue to be announced across the country. That said, there is no doubt the forest industry is going to survive, though it will be in a different form.
One of the changes we’ve seen in the industry is in the title of Canada’s top lumber producer. The full details will be in a story soon to be posted to www.forestnet.com (and running in the April issue of Logging and Sawmilling Journal) but West Fraser has now topped Canfor as the top lumber producer in Canada, and Tolko has taken the number three position, nudging out AbitibiBowater.
The annual listing of the top Canadian lumber producers—done by Russ Taylor and his very capable group of folks at International WOOD MARKETS Group Inc., Canada’s largest wood products consulting firm (www.woodmarkets.com)—clearly shows the severe impact of drastically reduced softwood lumber demand on 2008 company production volumes.
With that decrease have come changes in the rankings of the top lumber producing companies in Canada, with West Fraser now on top, replacing Canfor.
The survey shows total Canadian softwood lumber production dropped from 29.95 billion board feet in 2007 to 23.8 billion board feet in 2008 (down 20.5 per cent) and has decreased by over 32 per cent from the peak Canadian lumber production of 35.1 billion board feet in 2004.
Due to considerably less scheduled downtime and lower operating costs in 2008, the survey notes that West Fraser was Canada’s largest softwood lumber producer in Canada at 3.4 billion board feet (3.5 billion board feet in 2007) compared to Canfor at 3.3 billion board feet (4.1 billion board feet in 2007). This is significant—it marks the first time since 1999 that Canfor has not been #1 in Canada. Tolko jumped to the #3 position as curtailments caused output at AbitibiBowater to drop by 36 per cent in 2008.
Watch the www.forestnet.com web site for the April issue of Logging and Sawmilling Journal and the full details on Canada’s Top Lumber Producers.
If you haven’t already, you may want to add www.forestnet.com to your favourite websites on your browser, for easy reference.
And watch this blog space for further forest industry news and views!
Paul MacDonald
Editor
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