tree tenderloin

tree tenderloin

Outside the Coopérative Forestière de Girardville (CFG) Tradition mill, huge trusses of 12x16s, 16 feet in length, are waiting to be delievered.

Checks and shrinkage

Checks and shrinkage

A log’s value can evaporate in the kiln but there are some tricks to prevent checks and shrinkage.

Builders optimistic in the US

Builders optimistic in the US

The pace of housing construction stalled in June, with total housing starts falling 9.3 per cent for the month to a seasonally adjusted annual pace of 893,000.

Counterfeit tools on the rise

Counterfeit tools on the rise

Low quality, high danger as more counterfeit chainsaws are available.

Leadership in a changing climate

Leadership in a changing climate

Professionals are required to use the best available science in making our decisions, and so we recognize that climate change is occurring.

video
Some environmentalists exaggerate...
Quebec’s forests are not threatened, according to a new documentary and an Economic Note from the Montreal Economic Institute.Video location: QuebecRecording date: August 2014
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FPAC on innovation in forestry...
Catherine Cobden explains what is meant by innovation in forestry
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WorksafeBC cautions workers falling trees...
WorksafeBC cautions workers falling trees
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Edgewood optimized...
Edgewood optimized

Harvesting

Forwarders deliver

Sept. 2, 2014 - Manufacturers of forestry forwarders have taken great strides in working to improve the quality of this integral component of the logging contractors fleet of equipment. Over the past few years, we have seen improvements to fuel efficiency, operator comfort, easy access maintenance, power and durability. Forwarders have also fallen under the scope of expanding telematics technology, helping contractors get the most out of their equipment. In our spotlight on forwarders, we take a look at the newest models available from manufacturers with machines already hard at work in Canada’s forests. John DeereJohn Deere recently announced the North American debut of its Tier 4 interim (IT4)/Stage IIIB cut-to-length forwarders. The IT4 engine comes standard on the 1210E, and as an option on the 1510E. These forwarders are powerful, efficient and clean on emissions, which translates to higher productivity, increased uptime and lower daily operating costs. The 1210E and 1510E IT4 models are equipped with forest-tough bogie axles, V-groove axle mounts, strong frames and a durable middle joint, which provides exceptional uptime throughout the machine’s lifetime.   TigercatTigercat has recently released the new heavy-duty F195T85 crane and 430 and 530 series grapples for the 20-tonne 1075B forwarder. Designed and built by Tigercat, this crane is capable of lifting 20 to 30 per cent heavier loads and has 22 to 66 per cent more slew torque than the competition. The 430 and 530 grapples have larger load area capacities at 0.43 m2 and 0.53 m2, respectively, and are fitted with thick walled bushings for extended service life. EcoLogAll new Eco Log forwarders are powered by Mercedes Benz engines offering low fuel and oil consumption along with lower emissions while producing more power. Utilizing Bosch Rexroth pump combined through reliable NAF components creates the hydrostatic mechanical transmission’s high pulling forces. Exceptional visibility is presented in the spacious cabin, which may be equipped with numerous options. Due to lightness, durability and range of motion, all EcoLog forwarders are delivered with Cranab loaders. As well, all D-class forwarders may be equipped with a variety of optional external equipment. KomatsuNew 855, 865 and 895 models feature new added payload, Tier 4 interim engines, hydrostatic transmissions, “comfort ride” bogies, ergonomic cabs and control systems, which provide greater productivity, comfort, and fuel economy than prior models. The 22-ton capacity 895 features a new chassis, more powerful crane, comfort bogies and bigger wheels for added tractive effort, speed and comfort in difficult terrain. The MaxiXplorer 3.1 control system integrates all vehicle, engine, transmission, and crane functions for unmatched performance. CatThe 20-metric ton Cat 584HD transports large payloads long distances over difficult terrain. The 8-wheel drive forwarder features the 147 kW Cat C7 ACERT engine, providing fuel efficiency through high torque in the 1400- to 1600-rpm range. The over-sized cooling fan requires less horsepower and cools more quickly, allowing loggers to go deeper into the woods and haul bigger loads, faster. The rugged frame, heavy duty cast articulation and large oscillation bearings are built for long service life. LogsetProfitable timber harvesting requires a reliable forwarder with low running cost and ease in use for seamless cooperation between the operator and the machine. The wide LOGSET GT Forwarders’ range is the result of 20 years of product development, an extensive experience in forest machinery and listening to the customers’ needs. Bringing better efficiency, better durability and better productivity with even lower fuel consumption to the market. RottneThe Rottne F18 is a large forwarder with a load capacity of 18 tonnes, providing more efficient transport for long forwarding distances. An adjustable load area is also available as an optional extra. The portal bogies, with large wide wheels, provide excellent bearing capacity and smooth and gentle travel. The wagon is available in two frame lengths and the load area has a very low centre of gravity. PonsseThe Ponsse ElephantKing forwarder is ideal for extremely demanding conditions and heavy loads. The ultimate tractive force, a powerful engine and a 20-tonne carrying capacity guarantee efficient timber transportation on both steep sites and during long transports. The Ponsse ElephantKing has a powerful Ponsse K100+ loader, a load space with a cross-sectional area of 6.25 m2 and flexible drive transmission and loader control system. TimberPro/TanguayThe TimberPro TF840 forwarder features a Cummins 8.3L, 300 hp engine. The TF840 has a lift capacity of up to 5,842 kg and a base machine weight of 24,000 kg. The TimberPro TF840B forwarder with its powerful drive train can be transformed into a clam bunk skidder for tree-length operations. It is available with an optional four-feet longer rear frame and custom long length wood basket to forward long length logs. The cab forward design and centered steering joint allows the TF800B series to have a very tight turning circle with no off tracking.  

Fecon's Log Jaw cuts costs

Aug. 28, 2014 – Fecon has introduced a new excavator mounted Log Jaw Wood Splitter to their forestry attachment product line. The Log Jaw is a hydraulic-powered wood splitting attachment that is also made for skid steers and loaders. The Log Jaw will rip apart long, large diameter logs and stumps into manageable pieces for chippers, wood grinders, or for firewood processing. The Log Jaw is Fecon's low cost, high return solution for handling oversized and difficult to process logs and stumps that would otherwise require expensive disposal fees. Splitting logs into optimally-sized pieces improves the efficiency and production of chippers and grinders, while putting less stress on and requiring less horsepower from the processing equipment. The Log Jaw attachment-- weighing approximately 995lbs mounted on an excavator has a 40" jaw opening (tip to tip) and 360° of rotation, allowing the operator to attack oversized wood from any angle. Made for 8 to 16 ton excavators, a mount will be built to your excavator's specifications for easy installation. If you would like more information about Fecon or the Log Jaw please call Courtney Shafer at 513-696-4430 or e-mail at cshafer@fecon.com.

Sawmilling

 The mill, which started operation in October 2013, should manufacture between 15,000 and 20,000 m3 of wood annually; this represents approximately 12,000 bd-ft. tree tenderloin

Sept. 2, 2014 - Outside the Coopérative Forestière de Girardville (CFG) Tradition mill behind the Administrative Office, huge trusses of 12x16s, 16 feet in length, are waiting to be delivered. A little farther away in the woods, the “tenderloin” of the forest, hundreds of large trees are lying on the ground before being debarked and sorted. Only the cream of the crop will go to the factory. The crooked or low-quality wood will be sent directly to the shredder to be made into biomass. Upon entering the factory, I see huge, 12-inch planks of trembling aspen, 16 feet in length, propped up against the wall. A little further on, trimmer François Gagné sorts pieces based on their quality. Artistic pieces with interesting curves are preserved to bring maximum value to the wood. All this beautiful, seldom-seen wood is inspiring. Ideas for a thousand new projects spring to mind. The entire structure for accommodating the equipment and treating the wood in the factory is made of wood. With the banks being risk-averse and financing difficult to obtain, “we have had to create this mill with the means we have,” says François Girard, mill co-owner together with the CFG. “Compared to a metal structure, the wooden structure decreases costs by 50 per cent.” Besides, the three-inch-thick wooden floor enormously reduces machinery vibration, which, despite the size of the equipment, is now almost imperceptible. Valuing “annoyances”“We would not want to compete with traditional mills, because they are also our clients who allow us to live by purchasing large volumes of wood,” explains Jérôme Simard, Director-General of the CFG. “For most of the sawmills, a log measuring over 17 inches in diameter is an annoyance.” Creating value using the “annoyances” from other factories is the concept that gave birth to the CFG Tradition Mill. But the plant, which had belonged to the co-op from 1994 to 2000 and then to Bowater until 2003, lost its supply. Wood was needed in order to resuscitate the mill. And the opportunity came, thanks to the wood auctioning which has emerged with the new forest system launched in April 2013. “The new forest system was implemented precisely to promote innovative projects by manufacturing companies in order to increase value,” notes Luc Bouthillier, forest economist and professor of forest policy at Laval University. Little wood, big valueThe mill, which started operation in October 2013, should manufacture between 15,000 and 20,000 m3 of wood annually; this represents approximately 12,000 bd-ft. Five people operate the mill during a 10-hour work shift, while two employees deal with sorting and debarking in the yard. Next summer, the plant would like to add an evening shift to increase productivity. The amount of wood processed is admittedly small, but the added value is more than interesting. “While the price of a 2x4 in Boston is around $420 / bd-ft, which is a good price, we can create up to $3,000 / bd-ft. And when sawing a 12x12, we produce many bd-ft at a time,” stresses Jérôme Simard. Depending on the products, the bd-ft value varies between $900 and $3,000. In early March, the sawmill processes trembling aspen, “another annoyance,” which finds no takers in sawmills in Lac-Saint-Jean. The factory equipment is of a hybrid type. Based on orders, they can manufacture softwood or hardwood. “With the softwood, the grade is measured. This means that to make large beams, we are going to look at the quality of the wood around the heart. With hardwood, it’s the opposite. We aim to divide the heart to go for the best pieces towards the outside of the tree, because we find more nodes at the centre,” explains François Girard. Thus, based on the orders, trembling aspen is transformed into boards and Jack Pine, black spruce and larch are transformed into large-dimension beams of up to 26-foot-long 12x16s! These beams are intended for the high-end construction market. To manufacture these monsters, François Girard had to adapt equipment and train coop staff. “The equipment that we operate is made for large wood and requires custom expertise,” says the man who operated a Boisaco big-wood sawmill for four years before moving his equipment to north of Lac-Saint-Jean. Among other things, he has adapted his Hardy and Brothers trolley by 16 feet so it can take packages of up to 25 feet in length. It also uses a Cornell multi-saw edger and a Tronco surface edger. Also, by adding a 1,000-pound flywheel, he completely changed the transmission of a truck engine in order to use one motor instead of five. At only 28 years old, François Girard, who made his mother “flip out” by purchasing his first saw at age 14, is already an expert in his field. The large-wood enthusiast has proven to be the quintessential successor on which the CFG is counting to innovate and develop new products. “We want to master sawing 100 per cent to ultimately develop structured articles of wood,” explains the young man, who also has a background in carpentry and joinery.  

Checks and shrinkage

Aug. 28, 2014 - A log’s value can evaporate in the kiln but there are some tricks to prevent checks and shrinkage. For products measuring four inches wide or more (floors, panelling, etc.), a comparison chart shows how to identify components that are difficult to dry. This table on the right shows something quite surprising: the most stable species (going by the heartwood) for wide components is the Jack pine. However, the Eastern cedar can also be very stable if it undergoes smart sawing with the heartwood centred, since tangential shrinkage is low. Balsam fir and white pine are the worst species when in the form of small logs. In reality, the problem with these species is not encountered all that often in the industry because the logs are usually of a more significant diameter, which minimizes the problem. In the case of beech and larch, which normally originate from small logs, there is a strong interest in employing smart sawing with the heartwood centered, and live sawing in order to maximize radial sawing with a view to having stable components, for example for paneling and floors. Black spruce is the worst species for domestic products (8 per cent MC) and panelling (10 per cent MC ± 2) because of its strong radial and tangential shrinkage, the presence of juvenile wood, and small-diameter logs which aggravate the difficulty.  Fir is easy to dry for use as interior wall boards or for wide panelling – if it undergoes live sawing to maximize low radial shrinkage components. Based on the above chart, it is easy to understand why the Finns, for example, maximize the use of sawn planks that have undergone live sawing with the heartwood centered in order to stabilize wider components made of larch and beech. In summary, the larch is still the worst species to dry because of its high T/R ratio, small-diameter logs, and, above all, the great difference between spring wood and summer wood in terms of growth ring density. Beech is the second-worst species because of its substantial tangential shrinkage, small-diameter logs, and possible surface checks related to ray cells of considerable diameter, which nonetheless constitute the beautiful appearance of this species for use in domestic products.   Smart sawing geared to the productsUsing lumber industry saws for producing value-added products, which are issued in accordance with the National Lumber Grades Authority (NLGA) Standards, is sometimes hazardous. This practice also increases the volume of discards because cutting techniques are based on productivity and yield, not on sawing patterns tailored, for dimensional stability, to the production of a product with a specific appearance.   For example, there are pieces of wood with the pith on the edge, something which is catastrophic in drying, or where the pith is on the surface, which causes cupping in patio or broad panelling components. In smart sawing for dimensional stability, either the pith is centred in the middle of the wide components or the saw blade is placed exactly on the pith to ensure discard-free thickness planing; live sawing (parallel slicing) can also be carried out to maximize wider radial pieces (as the Finns do with larch or with wider panelling made from all species). The physical quality of the component takes precedence over the material yield/productivity. The pith should not be included at all on wall planks measuring 3/8 in. in thickness; otherwise, there will be splits in shaping for many pieces, even at the installation stage. Heat treatment and pitch settingCertain species, such as larch, contain volatile aromatic compounds which oxidize over time and cause blotches to appear on the wood six months after it has been installed. A drying heating period of 190°F for 12 hours stabilizes the wood’s natural colour by evaporating the volatile compounds. Pre-drying the wood by air prior to the drying renders this treatment impossible. It is also impossible to employ these treatments using dessication dryers unless a hybrid system is available. In some cases, partial resin crystallization suffices. To achieve this, the wood undergoes heat treatment of 190-200°F over 12 hours for 4x4s and over 24 hours for 8x4s before reaching the fibre saturation point (30 per cent MC) in order to avoid over-drying the more permeable parts. The latter is both unnecessary and risky in terms of possibly crystallising large pockets of resin that are more easily eliminated during shaping. Smart box pile systemI have adapted this technique for drying beech, which originated in Denmark, for drying larch, and it may be useful for all species or planks with a significant radial and tangential shrinkage differential. This applies especially to planks cut from small logs, which have a radial surface on one side and a tangential sawing surface on the opposite side. That comprises a situation which triggers the potential for cupping, important in the case of panelling or floor components having a width of four inches or greater. The greater one’s desire to offer a wide component to the client is, the greater the problem becomes (see illustration on page 42).   The technique consists of alternating the direction of the heartwood surface from one row to the next during the lathing process in order to counteract the shrinkage forces causing the cup in drying. This is particularly effective during a drying phase of 180°F or greater in order to achieve the wood’s plasticity behaviour. The boards and crosspieces must be perfectly aligned, with double boards placed at the end of the packages. Place the wide and long pieces around the package, with not more than two consecutive lengths per package. Place lathing at every two feet or less, with stickering being over two inches wide and having no variation in thickness (stickering preferably to be made from dry material). This article is a sequel to one published on larch in a previous issue of Canadian Forest Industries (see For the love of larch March/April 2014). Pierre Asselin, P.Ing. is the Industry Services Coordinator for SEREX in the Quebec office.

Industry news

Markets shifting to apartments

Aug. 28, 2014 – According to a report in the Wall Street Journal, U.S. economists are noticing a shift in construction activity away from single-family homes to apartment buildings. According to numbers from the National Association of Home Builders, the average single-family home costs about $323,000 to build and generates almost three full-time equivalent jobs. While the cost of an average rental apartment is only $128,000 and doesn't generate much more than one full-time job. Home ownership rates dropped after the housing boom, leaving former owners renting apartments. The younger generation of potential first-time buyers have been holding off on purchasing a home and choosing to rent. But eventually younger families may choose to buy a home and as the labour market firms up, home ownership trends will go up with it. For more information, go to http://blogs.marketwatch.com/capitolreport/2014/08/19/home-building-to-provide-less-economic-support-as-market-shifts-toward-apartments-economists/

Lumber prices up over summer

Aug. 27, 2014, Toronto - Scotiabank's Commodity Price Index edged down by 0.3% month-over-month (m/m) in July, but the Forest Products Index advanced by 2.4% month-over-month in July and remains 5.0% higher than a year earlier. Western Spruce-Pine-Fir 2x4 lumber prices have rallied back seasonally from US$324 per mfbm in June to US$351 in July and a lucrative US$367 in late August. U.S. housing starts climbed to 1.093 million units annualized in July, centred in multi-family dwellings. U.S. homebuilder confidence has increased to a 7-month high, given a strengthening U.S. job market (employment gains have averaged a healthy 244,000 in the past six months) and cheaper mortgage costs. NBSK pulp prices stayed near-record highs of US$1,030 per tonne, but inched down to US$1,020-1,030 in August, with a 2-day increase to 27 days-of-supply in world bleached softwood kraft inventories and a surge in hardwood stocks to 46 days. Read the full Scotiabank Commodity Price Index online at: http://www.scotiabank.com/ca/en/0,,3112,00.html.

Housing starts rebound in July

Aug. 26, 2014 - After a disappointing June report, U.S. housing starts rebounded with a 15.7% increase in July. The June dip was caused by a fall in single-family construction in the U.S. South and was eliminated as single-family construction rose 8.3% with increases in three of the four U.S. regions, according to the National Association of Home Builders (NAHB). The rebound mirrored rising home builder confidence. The August NAHB/Wells Fargo Housing Index rose two more points to 55, approaching the 2014 high of 56 from January. Expectations for the next six months increased by two points to 65. According to the NAHB, a key question going forward is the degree to which the mix of buyers may change. The share of first-time home buyers remains weak and has resulted in a rising trend in new single-family home size. If more first-time buyers enter the market in the future, it will hold back the median new single-family home size. Consumer debt positions continue to improve, says the NAHB, which should be a net positive for housing demand.  Meanwhile, the count of unfilled construction sector jobs increased in June to 127,000, the fourth highest tally since the end of the recession. The number of job openings has grown significantly since 2011 as the housing industry has recovered. Builders will find it challenging to meet demands if they're unable to find enough workers.  For more information, go to http://www.nahb.org.

Port Hawkesbury hosts CWF

Aug. 26, 2014 - The Canadian Woodlands Forum will hold its 2014 fall meeting and education session in collaboration with FPInnovations and the Canadian Wood Fibre Centre in Baddeck, Cape Breton, NS on October 8 and 9, 2014. The conference will be hosted by Port Hawkesbury Paper. For more information on the meeting and schedule of events, go to www.cwfcpf.org.

Wood Panels

Ainsworth election results

Aug. 14, 2014 - Ainsworth Lumber Co. Ltd. announced the results from its 2014 annual general meeting of shareholders held on August 12, 2014. All of the eight nominees listed in the Corporation's Management Proxy Circular dated July 3, 2014 proposed by management for election to the board of directors at the Meeting were elected to the board. The directors will remain in office until the next annual meeting of shareholders or until their successors are elected or appointed. The results of the vote on the election of the directors are as follows:                                 Votes in Favour                           Votes WithheldName                         #               %                           #                %---------------------------------------------------------------------------- Robert Chadwick   180,106,039   94.74                  9,997,575      5.26Paul Gagne           190,054,174   99.97                      49,440       0.03Peter Gordon        189,052,368   99.45                  1,051,246      0.55Paul Houston        190,053,174   99.97                       50,440      0.03John Lacey           189,990,074   99.94                     113,540      0.06Jim Lake               189,146,915   99.50                     956,699      0.50Gordon Lancaster 190,053,174   99.97                       50,440      0.03Pierre McNeil        189,052,515   99.45                  1,051,099      0.55

Ainsworth remains optimistic

Aug. 13, 2014, Vancouver – Ainsworth Lumber announced higher shipment volumes and a reduction in unit costs in its Q2 financial results. Ainsworth President and Chief Executive Officer, Jim Lake said, "North American OSB market conditions were relatively weak as the spring building season did not materialize as anticipated. North American benchmark OSB prices were stable relative to the prior quarter, although they were nearly 40% or U.S.$130/msf lower than the second quarter of 2013. Despite the slower pace of housing growth in the near-term, we are optimistic about the longer-term recovery and continued absorption of industry supply. The recent slower market environment in North America does highlight the strategic importance of our traditional export market in Japan as well as the progress we are making in markets such as China for new applications of OSB." Financial Results Sales of $117.4 million in the second quarter of 2014 were $10.1 million lower than sales of $127.5 million for the same period in 2013. The decrease in sales was mainly due to a 24% decrease in realized pricing. The impact of the U.S. benchmark declines on our realized pricing was moderated by the effect of a weaker Canadian dollar relative to the second quarter of 2013 and more stable export pricing in Japan, combined with a 21% increase in sales volumes due to additional production from High Level. In the first half of 2014, sales were $225.2 million compared to $269.3 million in the same period of 2013. The $44.1 million decrease was related to a 25% decrease in realized pricing, partially offset by an 11% increase in sales volumes and the same factors noted above. The increase in volume from High Level was partially offset by transportation issues that limited shipments during the first quarter of 2014. Adjusted EBITDA was $13.1 million in the second quarter of 2014 compared to $50.7 million in the same period of 2013, largely as a result of lower realized pricing. Notwithstanding the significant reduction in gross profit, net income from continuing operations in the second quarter of 2014 was $9.5 million higher than the prior year. This increase was largely due to fluctuations in non-cash accounting gains and losses and income tax expense combined with decreased selling and administration expense. Adjusted EBITDA for the first half of 2014 was $23.3 million compared to $113.2 million in 2013, due mainly to lower realized pricing. Net loss from continuing operations in the first six months of 2014 was $2.2 million, compared to net income of $39.3 million for the same period in 2013, representing a decrease of $41.5 million. The decrease reflected lower gross profit, partially offset by fluctuations in non-cash accounting gains and losses and income tax expense. Margins Adjusted EBITDA margin on sales for the second quarter of 2014 was 11.2% compared to 39.8% in the same period of 2013 (10.3% in the first half of 2014 compared to 42.0% in the same period of 2013). The decreases were largely related to lower realized pricing in North America. Benchmark OSB pricing remained stable during the second quarter of 2014, although down significantly from the same periods last year, with North Central and Western Canadian pricing for 7/16" OSB averaging U.S.$219 and U.S. $206 per msf, respectively, representing a decrease of 37% versus the second quarter of 2013. Sequentially, the North Central benchmark price remained flat, while the Western Canadian benchmark price decreased 6% versus the prior quarter. Liquidity At June 30, 2014, Ainsworth's available liquidity, consisting of cash and cash equivalents, was $103.2 million, a reduction of $34.2 million since December 31, 2013 resulting from our seasonal log inventory build, semi-annual interest payment and capital expenditures, combined with the timing of accounts receivable and accounts payable. Outlook While the pace of improvement has been slower than previously expected, we remain optimistic about the medium to long-term outlook as U.S. housing starts recover to more historical levels. Additionally, we continue to experience growth and stable pricing in our traditional export market of Japan. We are also continuing to advance our opportunities in export markets such as China for new applications of OSB. The restart of our High Level mill will allow us to meet the growing requirements of our existing North American and export customers as well as service new market segments over the longer term.

Remanufacturing

Moulding bull market rally

Aug. 13, 2014 - A wave of demand is coming and so are higher prices, concludes Peter Butzelaar the Vice President of International Wood Markets Group in his U.S. Clear Pine Lumber and Moulding Market Outlook: 2014-2018.  After enduring four years of declining demand of epic proportions, underlying demand is beginning to re-emerge. "Although not the strong start the industry was anticipating for 2014, the results in the second half of this year should build on the demand gains made in 2013," comments co-author Russell Taylor. WOOD MARKETS is projecting U.S. housing starts to surpass 1 million starts in 2014 followed by an additional 125,000 starts in 2015. As the labour market and income levels improves, housing demand will see accelerating growth as will residential repair and remodelling (R&R) - the two main drivers of moulding demand. However, due to mill closures, supply chain consolidation, and limited supplies of domestic clear pine fiber, traditional moulding supply in North America is forecast to struggle to keep up with demand. For more information on the report, go to www.woodmarkets.com.

Stella-Jones sales up 23%

Aug. 11, 2014, Montreal - Stella-Jones announced financial results for its second quarter ended June 30, 2014. Sales reached $344.8 million, up 22.7% from $280.9 million in the same period last year. "Solid industry demand for Stella-Jones' core products and the contribution from recent acquisitions led to a strong sales growth in the second quarter of 2014. As railway tie and utility pole replacement programs continue to gain momentum, our proven ability to respond to product and service requirements enables us to further penetrate our markets. As anticipated, higher costs for untreated railway ties had a negative effect on profitability. However, strong sales growth and our continued focus on optimizing our plant network resulted in a year-over-year increase in net income," said Brian McManus, President and Chief Executive Officer. SECOND QUARTER RESULTS Sales reached $344.8 million, up 22.7% from $280.9 million in the same period last year. The operating assets acquired from The Pacific Wood Preserving Companies ("PWP") on November 15, 2013 and from Boatright Railroad Products, Inc. ("Boatright") on May 22, 2014 contributed sales of $12.0 million and $3.7 million, respectively. The conversion effect from fluctuations in the value of the Canadian dollar, Stella-Jones' reporting currency, versus the U.S. dollar, increased the value of U.S.-dollar denominated sales by about $18.0 million when compared with the previous year. Excluding these factors, sales increased approximately $30.2 million, or 10.8%. Railway tie sales amounted to $141.5 million, up 18.1% from $119.8 million a year earlier. Excluding sales from the PWP and Boatright assets, as well as the conversion effect, railway tie sales rose approximately $7.7 million, or 6.4%, reflecting solid market demand from replacement programs. Sales of utility poles reached $121.6 million, up from $95.1 million last year. Excluding sales from the PWP assets and the conversion effect, utility pole sales increased $14.0 million, or 14.7%, as a result of larger customer orders for distribution and transmission poles stemming from increased demand from replacement programs and certain special projects. Sales in the residential lumber category totalled $49.4 million, versus $41.3 million a year ago, mainly reflecting solid demand in Western Canada and the United States. Industrial product sales reached $25.1 million, up from $17.0 million last year due to the contribution of the PWP and Boatright assets as well as increased sales of rail-related products. Finally, non-pole-quality log sales amounted to $7.2 million, versus $7.7 million a year ago, as a result of the timing of timber harvesting. Operating income stood at $41.6 million, or 12.1% of sales, versus $41.0 million, or 14.6% of sales, last year. The decrease as a percentage of sales is mainly due to higher year-over-year costs for untreated railway ties, partially offset by greater efficiencies throughout the company's plant network. Results for the second quarter of 2014 also include a $1.6 million write-off of certain property, plant and equipment in the United States and acquisition-related costs of $616,000 in connection with the Boatright transaction. Net income for the second quarter of 2014 increased 9.1% to $28.8 million or $0.42 per share, fully diluted, compared with $26.4 million or $0.38 per share, fully diluted, in the second quarter of 2013. SIX-MONTH RESULTSFor the six-month period ended June 30, 2014, sales amounted to $602.3 million, versus $503.5 million for the same period in 2013. Acquisitions accounted for total sales of $28.9 million, while the conversion effect from fluctuations in the value of the Canadian dollar versus the U.S. dollar had a positive year-over-year impact of $34.3 million on the value of U.S. dollar denominated sales. Excluding these factors, sales increased approximately $35.7 million, or 7.1%. Operating income was $76.4 million, or 12.7% of sales, up from $70.6 million, or 14.0% of sales, last year. Net income reached $51.3 million, or $0.74 per share, fully diluted, compared with $45.2 million, or $0.65 per share, fully diluted, a year ago. FINANCIAL POSITIONAs at June 30, 2014, the company's long-term debt, including the current portion, stood at $456.8 million compared with $407.0 million three months earlier. The variation essentially reflects working capital requirements and the acquisition of Boatright. To partially finance this acquisition, the company's committed revolving credit facility was increased from $400.0 million to $450.0 million. As at June 30, 2014, an amount of $391.7 million had been drawn against this facility. As a result of this higher debt, Stella-Jones' total debt to total capitalization ratio was 0.43:1 as at June 30, 2014, versus 0.40:1 three months earlier. OUTLOOK"We expect healthy demand for our core products for the remainder of the year driven by a better economy and sound fundamentals in our main sectors of activity. With regards to higher cost for untreated railway ties, margins will be impacted in the short term, until we are able to adjust selling prices as per provisions in most of Stella-Jones' multi-year contracts. Further profitability improvements will also be driven by sustained initiatives to optimize efficiency across our expanded North American network following recent acquisitions," concluded Mr. McManus.

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