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.

Climate change requires action in BC

Climate change requires action in BC

"Climate change is occurring and it has fundamental impacts on British Columbia's communities and ecosystems."

Stella-Jones uses customized loaders

Stella-Jones uses customized loaders

When it came to choosing a replacement for their aging log-handling equipment, the two site managers, working 500 miles apart, came to the same conclusion.

FPAC on innovation in forestry...
Catherine Cobden explains what is meant by innovation in forestry
WorksafeBC cautions workers falling trees...
WorksafeBC cautions workers falling trees
Edgewood optimized...
Edgewood optimized
Forestry waste put to use...
Forestry waste put to use


Kenworth monitors tire pressure Kenworth monitors tire pressure

July 30, 2014, Kirkland, Wash. – The Kenworth T680 and Kenworth T880 are now available with the fuel-saving SmarTire Tire Pressure Monitoring System (TPMS) by Bendix CVS as an option when specifying these models. The factory-installed Bendix system uses wheel-mounted sensors in each tire to monitor the tire's pressure and temperature. Sensors are located on the steer and drive axle wheels. If tire pressure becomes too low, or tire temperature becomes too high, the system sends a signal to the driver via the dash display. Operating at recommended tire pressure is important for optimal tire life and fuel economy. "Fleets and truck operators are becoming more proactive in addressing tire inflation as they strive to maximize each truck's fuel efficiency," said Kurt Swihart, Kenworth marketing director. "Now, with the Bendix system for the T680 and T880, they can take advantage of an easier, very efficient and time-saving way to regularly monitor tire pressure and temperature and gain enhanced tire life. The result can be less downtime and more money in their pocket." According to Bendix, a tire that is under-inflated by as little as 10 per cent can result in a 1.5 percent drop in fuel economy, which may increase fuel spending by up to $1,000 per year for a single truck. Under-inflation by 20 per cent results in a 30 per cent reduction in tire life. A tire failure on the road due to improper tire inflation can also rack up large roadside assistance charges, depending on when and where they occur. For more information call or visit a local Kenworth dealer, or visit Kenworth Truck Company's internet home page is at Kenworth is a PACCAR company.

Tigercat breaks new ground

July 30, 2014, Paris, Ont. – Tigercat has broken ground on its new $12 million, 125,000 square foot manufacturing facility in Paris, Ontario. In an official ceremony held at the site of its current Paris-based production facility, a 30,000 sq. ft. building, the company welcomes staff, partners and community officials to break ground and mark the start of construction. "The Paris expansion is a long time coming," said Tigercat CEO Ken MacDonald. Tigercat has been in the small town of Paris, located approximately 100km southwest of Toronto, since 1995 when it purchased its current facility. The new building will be located on the same property as the current plant, on a previously vacant lot at the northwest corner of the lot. "This is a significant milestone in the history of our company," said Tony Iarocci, President of Tigercat. Tigercat has a rich history in the region. Tigercat began in 1992 at the MacDonald Steel fabrication plant in nearby Cambridge, located approximately 30km north of the Paris site. Since that point, the company has expanded to facilities in other nearby communities, with plants in Brantford and Woodstock. Tigercat is one of the few remaining heavy equipment manufacturers in a region that once was at the heart of the industry. Companies such as John Deere, Caterpillar, TiberJack, Massey-Ferguson and Cockshutt used the call the area home, but have all since either shut down or reorganized their operations in a different location. The new plantThe new 125,000 sq. ft. manufacturing plant will initially focus on swing-to-tree and cut-to-length attachments. That includes the 200 series material handlers and the 800 series tracked feller bunchers, as well as shovel loggers. The facility is meant to also provide capacity relief for its other plants, especially the one in Woodstock. That will help the company address current needs in the market.The current Paris facility produces undercarriages for the company's extensive product line. The building is being designed and powered for multi-purpose capabilities, providing Tigercat with the flexibility to change product lines manufactured at the plant as worldwide customer demands change. The plant will contain three bays, with 6x32-ton cranes per bay. J.H. Cohoon Engineering of Brantford has provided all of the engineering needs for the new plant. Another Brantford company, Vicano Construction, has been awarded the building contract. It is expected that the plant will be built in time for a Spring 2015 move-in, with full production to follow in the summer of 2015.  


Western, union reach agreement

Aug. 1, 2014 - A new five-year labour contract between Western Forest Products and the United Steelworkers union has been ratified by a majority of union members. Approximately 1,500 Western employees are covered under this new collective agreement that expires on June 15, 2019. The previous agreement had expired on June 15, 2014. "We are pleased with the strong support expressed by our employees in ratifying this agreement," said Don Demens, President and Chief Executive Officer. "This is the second successive agreement that we have reached with the union in a co-operative manner, and for that I would like to recognize all parties involved for their efforts. A continuation of our partnership is paramount to the success of the Company and our ability to build a globally competitive, sustainable forest products business on the coast of B.C." About Western Forest Products Inc. Western is an integrated Canadian forest products company and the largest coastal British Columbia woodland operator and lumber producer with an annual available harvest of approximately 6.4 million cubic metres of timber, of which approximately 6.2 million cubic metres is from Crown lands and lumber capacity in excess of 1.1 billion board feet from eight sawmills and two remanufacturing plants. Principal activities conducted by the Company include timber harvesting, reforestation, sawmilling logs into lumber and wood chips and value-added remanufacturing. Substantially all of Western's operations, employees and corporate facilities are located in the coastal region of British Columbia, while its products are sold in over 25 countries worldwide.

WorkSafeBC fines Lakeland Mills

July 30, 2014 – The owners of a sawmill in Prince George, B.C. have been fined more then $700,000 by WorkSafeBC. An explosion at Lakeland Mills on April 21, 2012 resulted in two fatalities and twenty-two injuries. The sawmill was found to be in violation of the province's Workers Compensation Act and occupational health and safety regulations. The $724,163 fine is the harshest penalty WorkSafeBC can levy against the mill. It has three months to file an appeal. For more information, go to

Industry news

Interfor sets production record

Aug. 1, 2014 - INTERFOR CORPORATION reported second quarter net earnings of $21.6 million or $0.32 per share and EBITDA of $47.3 million, excluding the impact of one-time items including the restructuring and impairment charges related to the permanent closure of its Beaver-Forks operation announced today. Inclusive of these charges, net earnings in the quarter were $7.4 million or $0.11 per share. Lumber production in the second quarter was a record 582 million board feet, up 18% from the prior quarter. This growth reflects the addition of the Perry and Preston sawmills in March 2014, and higher operating rates at the company's BC Interior and US Southeast operations. Record lumber sales of 628 million board feet, including wholesale and agency volumes, were driven primarily by the increase in sales from the Company's US Southeast operations and by the draw-down of lumber inventories from the first quarter. On June 27, 2014, the Company announced a curtailment of its Beaver-Forks operation on the Olympic Peninsula in Washington State. Following a comprehensive strategic review, the Company has decided to consolidate production at its Port Angeles facility and to close the Beaver-Forks operation. By consolidating operations on the Peninsula, the Company believes it can enhance operations in the area and improve its overall financial results. Interfor recorded asset impairment and restructuring charges in the second quarter totalling $14.2 million relating to the Beaver-Forks operation, net of an $8.5 million deferred tax recovery. For the quarter, Beaver-Forks contributed $9.7 million of sales and negative EBITDA(1) of $0.4 million on production and sales of 21 million and 20 million board feet, respectively. Average commodity lumber prices were mixed in the second quarter. Western SPF 2x4 and HF Stud 2x4 prices dropped to US$335 and US$409, down US$32 and US$23, respectively, in part due to the impact of lumber inventories from the first quarter working their way through the distribution channel. The SYP Eastside 2x4 #2Btr benchmark price strengthened US$2 quarter-over-quarter to US$405 as transportation issues impacted the ability to move product to market. Demand for lumber in China was relatively stable with some tightening of credit apparent. Activity in Japan continued to reflect post-VAT impacts. A long-term incentive compensation recovery of $0.4 million, or less than $0.01 per share, was recorded in the quarter. In the second quarter, Interfor generated $45.7 million in cash from operations before working capital changes and $41.7 million after working capital changes. Capital spending amounted to $15.9 million during the quarter. In April, the company's Gilchrist mill completed the installation of a high-speed European moulder as part of its strategy to convert the mill into a producer of high quality boards. Although the mill's financial results were impacted by the start-up of the new equipment, the quality of product is excellent and has been positively received by the market. The mill is expected to make a positive contribution to the company's results in the third quarter. The company reduced its net debt during the quarter to $237.3 million or 28.1% of invested capital, leaving $145.4 million of available credit. Commodity lumber prices have stabilized since mid-June although some ongoing volatility is expected as the U.S. housing recovery seeks traction throughout the remainder of this year. Business activity in China is expected to be reasonably stable in the near term as the market adjusts to tightening credit policies and recent changes in currency values. The Japanese economy has indicated signs of recovery, aided by government stimulus packages including a tax rebate program for new home buyers to counter the VAT increase. Interfor will continue its disciplined approach to production, cost control, inventory management, and capital spending to help position the company to deliver above average returns on invested capital as conditions improve. At the same time, Interfor will remain alert to opportunities to position the company for long-term success. Sales Interfor realized $390.2 million of total sales, up 42.0% from $274.7 million in the second quarter of 2013, driven by the sale of 628 million board feet of lumber at an average price of $518 per mfbm. Lumber sales volume and average selling price increased 195 million board feet and 2.2%, respectively, over the same quarter of 2013. The growth in lumber sales volume was primarily in the U.S. market, where sales increased by 156 million board feet or 59.7% over the second quarter of 2013. This growth is mostly attributable to three sawmills acquired in the U.S. Southeast since July 1, 2013, higher operating rates and the draw-down of lumber inventories. The increase in the average selling price of lumber is primarily related to the strengthening of the U.S. dollar against the Canadian dollar by 6.6% and higher prices realized in non-U.S. markets as compared to the first quarter of 2013, partially offset by an increased proportion of Southern Yellow Pine sales. Log sales of $35.4 million represent an increase of $2.8 million or 8.6% compared to the same quarter of 2013. This sales growth is mostly related to a 14.3% increase in the average selling price on B.C. log sales, which accounted for 88.6% of log sales revenue in the quarter. Sales of wood chips and other residual products increased to $25.8 million, up $8.4 million over the comparable quarter of 2013. This increase mainly reflects the 39.2% increase in lumber production from Q2'13. Operations Production costs increased by $102.5 million or 44.3% over the second quarter of 2013, explained primarily by the 45.0% increase in lumber sales volume. Depreciation of plant and equipment was $14.0 million, up 49.0% from the second quarter of 2013. The majority of this increase is explained by the inclusion of depreciation on the three sawmills in the U.S. Southeast acquired since July 1, 2013, and higher operating rates. Depletion and amortization of timber, roads and other was $7.0 million, up 11.7% from the comparable quarter of 2013. This increase is mostly related to amortization of a non-competition agreement associated with the acquisition of Tolleson Ilim Lumber Company ("Tolleson"). Net Earnings The Company recorded net earnings of $34.9 million or $0.53 per share, higher compared to net earnings of $30.9 million or $0.55 per share in the first half of 2013. Excluding the impact of the restructuring and impairment charges associated with curtailment of the Beaver-Forks operation in Q2'14 and recognition of $19.3 million of previously unrecognized deferred tax assets related to U.S. operations in Q1'14, net earnings in H1'14 would have been $29.8 million and relatively in-line with H1'13. The Company's quarterly financial trends are most impacted by seasonality, levels of lumber production, log costs, market prices for lumber and the US$/CAD$ foreign currency exchange rate. Logging operations are seasonal due to a number of factors including weather, ground conditions and fire season closures. Generally, the Company's B.C. Coast logging division experiences higher production levels in the latter half of the first quarter, throughout the second and third quarters and in the first half of the fourth quarter. Logging activity in the B.C. Interior is generally higher in the first half of the first quarter, slows during spring break-up and increases in the third and fourth quarters. Sawmill operations are dependent on the availability of logs from our logging operations and our suppliers. In addition, the market demand for lumber and related products is generally lower in the winter due to reduced construction activity, which increases during the spring, summer and fall. Steady recoveries in the U.S. housing market helped drive up domestic demand and pricing through the end of 2012. Building on the positive momentum of 2012, U.S. housing starts surged, supporting higher lumber prices and positive net earnings in the first quarter of 2013. Mid-way through the second quarter of 2013, supply outstripped demand, and lumber prices dropped, ending the quarter at levels close to those of early 2012. Late in the third quarter of 2013, lumber prices started to rise in response to demand from China and improving U.S. housing starts. The North American lumber market was affected by both supply and demand factors in the first half of 2014, with commodity lumber prices remaining at relatively strong levels. Three sawmills acquired on March 1, 2013, and one sawmill acquired on July 1, 2013, contributed to growth in production, sales and earnings from 2012. Production, sales and earnings have also benefited since the acquisition of two sawmills on March 14, 2014. The volatility of the Canadian dollar against the U.S. dollar also impacted results, given that historically over 75% of the Canadian operation's lumber sales are to the U.S. and export markets priced in U.S. dollars. A weaker Canadian dollar increases the lumber sales realizations in Canada, and increases net earnings of U.S. operations when converted to Canadian dollars.

Tembec posts positive results

July 31, 2014, Montreal - Tembec profits were up in the second quarter; consolidated sales for the three-month period ended June 28, 2014, were $404 million, as compared to $399 million in the same quarter a year ago. The Company generated net earnings of $30 million or $0.30 per share in the June 2014 quarter compared to a net loss of $7 million or $0.07 per share in the June 2013 quarter. The June 2014 results include a gain of $14 million related to the sale of land. Operating earnings before depreciation, amortization and other items (adjusted EBITDA) was $30 million for the three-month period ended June 28, 2014, as compared to adjusted EBITDA of $30 million a year ago and adjusted EBITDA of $18 million in the prior quarter. Business Segment Results The Specialty Cellulose Pulp segment generated adjusted EBITDA of $19 million on sales of $126 million for the quarter ended June 2014, compared to adjusted EBITDA of $18 million on sales of $128 million in the prior quarter. Demand for specialty grades was flat while US and euro prices were relatively unchanged quarter-over-quarter. The prior quarter sales included a $2 million favourable adjustment for volume penalties paid by customers relating to the calendar 2013 period. Currency was unfavourable during the quarter as the Canadian dollar strengthened by 1.1% versus the US dollar and the euro. Overall, Canadian dollar equivalent pricing for specialty grades declined by $77 per tonne. US dollar prices for viscose grades also declined. Combined with the unfavourable currency effect, prices declined by $51 per tonne. The viscose market remains oversupplied and prices are relatively low. Overall, pricing reduced adjusted EBITDA by $4 million. Shipments were equal to 80% of capacity as compared to 81% in the prior quarter. Costs declined by $3 million due to the reversal of net realizable value write-downs as the Temiscaming mill shipped more viscose grade pulp than it had produced. Higher profitability in the chemicals business increased adjusted EBITDA by a further $2 million. The Specialty Cellulose Pulp segment generated operating earnings of $15 million, unchanged from the prior quarter. The Forest Products segment generated adjusted EBITDA of $5 million on sales of $108 million for the quarter ended June 2014, compared to adjusted EBITDA of $3 million on sales of $112 million in the prior quarter. Lumber shipments were equal to 84% of capacity versus 83% in the prior quarter. During the quarter, the random length lumber reference price declined by US $24 per mbf while the reference price for stud lumber increased by US $11 per mbf. The gap between the two grades narrowed as expected. Currency was unfavourable as the Canadian dollar averaged US $0.917, a 1.1% increase from US $0.907 in the prior quarter. The net effect decreased sales and adjusted EBITDA by $1 million or $6 per mbf. Costs decreased by $4 million. The spring and summer months are also seasonally lower operating cost periods. The Forest Products segment generated operating earnings of $4 million, compared to operating earnings of $1 million in the prior quarter. BC Land Sales Initiative The Company continued with its BC Land Sales Initiative. The objective is to realize up to $70 million in gross proceeds by December 2014. During the June 2014 quarter, the Company completed three land sales for proceeds of $16 million, bringing total sales to date to $39 million. The Company also has an agreement to sell additional parcels for $20 million. The transaction is conditional on the purchaser obtaining adequate financing. There can be no assurance that the transaction will be consummated or that the Company will attain its stated objective. Temiscaming Cogen Project Update The Company had previously indicated that the total construction cost of the project would be approximately $235 million. Updated projections now indicate that approximately $255 million will be required to complete the project. The overrun is largely due to higher labour costs. The initial estimate contemplated total labour man-hours of 810,000. To the end of June 2014, labour man-hours had reached 775,000 and projections indicate a further 152,000 man-hours will be required to complete the construction work, for a projected total of 927,000 man-hours. As a significant portion of the additional man-hours relate to higher cost specialized trades, the fully-loaded cost per man-hour is forecasted to be 7% higher than originally planned. The boiler erection is essentially completed and the remaining work will focus on piping, insulation and electrical work. The commissioning of several ancillary systems has begun and will accelerate as the summer progresses. The turbine was originally scheduled to produce contract power by mid-October 2014. This is now expected to occur in late-November 2014, a delay of approximately five weeks. Outlook Overall, the June 2014 quarterly results were better than anticipated. After experiencing relatively harsh winter conditions in the March 2014 quarter, all four business segments benefited from higher productivity and lower costs. This more than offset the negative effect of a stronger Canadian dollar and lower selling prices. The Specialty Cellulose segment results improved by $1 million due to lower costs at both pulp mills. The decline in specialty pulp prices was expected as the prior quarter had benefited from customer minimum volume penalties. The current quarter reflected the full impact of the lower contract prices that came into effect in January 2014. Prices for viscose grade also dropped in the most recent quarter. This market remains oversupplied and US $ prices are relatively low. Market conditions should remain at this level for the remainder of the calendar year. The improved results in the Forest Products segment were also driven by lower costs as the spring and summer months are normally lower cost periods for the sawmills. Stud lumber prices increased, closing the gap with random lumber as the latter declined. We anticipate similar results in the coming quarter. The Paper Pulp segment results saw a small improvement in profitability due to lower costs. The segment was able to make up for the weather related shortfall in shipments from the prior quarter. The new South American hardwood paper pulp capacity is impacting prices and we anticipate marginal profitability from this segment until the market absorbs this new capacity. The Paper segment rebounded well from what had been a very challenging March quarter, which was impacted by high prices for natural gas and electricity. The coated bleached board market is stable, but the export market for newsprint, on which North American producers are placing greater reliance, is under pressure. The Company is looking forward to completing the construction of the Temiscaming, QC, specialty cellulose Cogen project in the coming quarter. While the total estimated cost has increased, the project remains a critical element that will materially improve the mill's cost structure and margins. The Company is placing significant emphasis on training and commissioning in order to ensure a successful start-up of the boiler and turbine. The Company is also looking to complete the BC Land Sales Initiative. To date, $39 million has been realized and the Company will be focused on generating additional land sales in order to reach its $70 million objective.

Resolute notes improvements in Q2

July 31, 2014, Montreal - Operating income from wood products rose by $3 million in the second quarter for Resolute Forest Products. Despite continued distribution constraints, shipments were up by 19%, cutting inventory by 13% from the first quarter. Net income for the quarter ended June 30, 2014, excluding special items, of $19 million, or $0.20 per share, up from net income, excluding special items, of $18 million, or $0.19 per share, in the second quarter of 2013. GAAP net loss was $2 million, or $0.02 per share, compared to a net loss of $43 million, or $0.45 per share, in the second quarter of 2013. Sales were $1.1 billion in the quarter, down $16 million from the second quarter of 2013. "Costs and margins normalized this quarter after the disappointing weather-affected first quarter, delivering much stronger performances in each of our four segments," said Richard Garneau, president and chief executive officer. "We generated 50% of our adjusted EBITDA from our wood products and market pulp businesses in the last twelve months. Our competitive advantage rests on our cost-focused strategy and diversified asset base, giving us the tools to maximize earnings power in this challenging industry." Consolidated Quarterly Operating Income Variance Against Year-Ago Period The Company recorded an operating loss of $8 million in the second quarter, compared to operating income of $3 million in the year-ago period. Overall pricing was essentially unchanged in the quarter, as the 8% increase in market pulp prices was offset with lower average transaction prices in newsprint, specialty papers and wood products. Newsprint shipments rose by 3% and wood products by 22%, while specialty papers shipments were 2% lower. The increase in lumber shipments reflects an increase to production capacity and better market demand. Market pulp shipments were down by 15%, however, in part due to more internal consumption of hardwood kraft pulp and slowing North American demand, particularly softwood and recycled grades. With lower start-up costs and pension and other postretirement benefit expenses, overall manufacturing costs continued to improve. The Company also benefitted from its electricity cogeneration assets and asset optimization initiatives, offset in part by an increase in overall fiber costs and in maintenance and repair costs. The weaker Canadian dollar had a $22 million favorable effect on operating income. The Company incurred $52 million of accelerated depreciation and other closure-related costs, most of which came from the permanent closure of an idled paper machine at its Catawba mill in South Carolina. Selling, general and administrative expenses were $3 million lower in the quarter, primarily because of a reduction in project costs and the weaker Canadian dollar. Segment Operating Income Variance Against Prior Quarter NewsprintAt $18 million in the second quarter, newsprint generated $33 million more operating income compared to the first quarter. Shipments rose by 6%, or 32,000 metric tons, as the Company recovered from weather-related production disruptions and mechanical failures experienced in the first quarter, despite fiber availability limitations at certain mills in Québec. Export shipments represented 40% of total newsprint volume, compared to 44% in all of 2013. Average transaction price was essentially unchanged but the realized margin rose significantly due to a 9% drop in operating cost per unit (the "delivered cost"), to $568 per metric ton. The change in the delivered cost is due to the influence of the severe winter in the first quarter and lower, non-weather related maintenance costs in the second quarter. Finished goods inventory rose by 14%. Specialty PapersSpecialty papers generated an operating loss of $3 million in the quarter, compared to a loss of $24 million in the previous quarter. While the overall average transaction price was unchanged, higher realized pricing for white papers was offset by the effect of lower pricing for coated mechanical grades and, to a lesser degree, supercalender grades. Volume rose by 8% overall, led mostly by stronger shipments of white papers but also including improvements in other grades. The increase reflects a seasonal pick-up in catalogue and retail end-uses from first quarter lows as well as better production consistency following the weather-related production disruptions and mechanical failures experienced in the first quarter. The delivered costs normalized to seasonally-consistent levels, falling by 7%. There was a 15% increase in finished goods inventory. Market PulpOperating income in the market pulp segment rose by $16 million in the second quarter, to $24 million. Better realized pricing, strongest in fluff pulp grades but also meaningful in softwood and recycled grades, led to an overall 4% increase in average transaction price. Shipments did not improve as expected following the effects of weather-related production disruptions and distribution constraints in the first quarter. This reflects greater internal consumption of hardwood kraft pulp and softening North American demand, particularly softwood and recycled grades. The delivered cost fell by 3%, to $652 per metric ton, normalizing to seasonally-consistent levels following the difficulties in the first quarter. Finished goods inventory rose by 15,000 metric tons, or 15%. Wood ProductsCompared to the first quarter, operating income in the wood products segment rose by $3 million, to $15 million. The average transaction price was unchanged, reflecting the largely offsetting effect of higher market prices for stud lumber grades and lower market prices for random length lumber grades. Despite continued distribution constraints for lack of carrier availability carried over from the first quarter, shipments were 19% higher, which in turn cut finished goods inventory by 13% from the high levels reached in the first quarter. The delivered cost rose by 1% in the quarter. OutlookMr. Garneau added: "Our conscious effort to reduce lumber inventory in the second quarter helped improve shipments in this segment. With inventories closer to normal levels, we expect shipments to normalize in the third quarter. Despite the ongoing slow recovery in U.S. housing starts, prices for eastern grades held up in July. With our scale, financial strength and lower-cost operating platform, we've positioned ourselves as a long-term, reliable supplier for our customers, and our newsprint business has responded well, especially in the domestic market. But we're not expecting much improvement in export markets for the remainder of the year, based on lower international demand." "As some major hardwood pulp capacity increases are coming online, the balance of the year remains somewhat uncertain for pulp. Pricing in specialty papers is also more uncertain because of the pressure of lower operating rates in coated papers and supercalender grades, although we do expect to see seasonal improvement in shipment volumes."

WFP log costs, revenue up

July 30, 2014, Vancouver - Western Forest Products Inc. earned 15% higher lumber revenue over last year in the second quarter of 2014. With adjusted EBITDA of $40.9 million the second quarter showed an improvement of $8.1 million over the first quarter 2014 result but $4.0 lower than the second quarter 2013 result. The company reported revenue of $296.2 million for the second quarter of 2014 compared to $246.0 million for the first quarter of 2014 and $262.3 million for the second quarter of 2013. "Despite the challenges that we faced in its second quarter, we delivered another strong performance. Increased shipments and an improved sales mix drove our revenue to its highest level in seven years," said Don Demens, President and Chief Executive Officer. "We believe that gradually improving market conditions and the efficiencies from our strategic capital investments, have positioned our Company for continued growth." Net income for the second quarter of 2014 was $29.2 million ($0.07 per diluted share) compared to a net income reported for the first quarter of 2014 of $23.6 million ($0.06 per diluted share) and a net income reported in the second quarter of 2013 of $35.5 million ($0.07 per diluted share). Overview July 31, 2014 - Western reported adjusted EBITDA of $40.9 million for the second quarter of 2014, an $8.1 million improvement over the prior quarter and a $4.0 million decline from the second quarter of 2013. Its adjusted EBITDA margin of 13.8% in the second quarter of 2014 was consistent with the prior quarter. Its revenue in the second quarter of 2014 is the highest quarterly revenue reported in seven years, and reflects improved product pricing, increased lumber and log shipments, an improved product mix, and the benefit of a weaker Canadian dollar ("CAD"). Increases in its log harvesting and freight costs contributed to a 3.3% decline in its adjusted EBITDA margin in the second quarter 2014, compared to the same quarter of 2013. Its costs and production levels were also impacted by its decision to close operations at all its manufacturing facilities for at least three business days following the tragic shooting on April 30, 2014, at its Nanaimo sawmill, when two employees were fatally wounded, and two others injured. Average prices realized in the second quarter of 2014 for its lumber products were 4% better than the second quarter a year ago, supported by a favourable exchange rate in the current quarter, and improved pricing in North American specialty products. Average prices realized for logs sold improved 7% in the second quarter of 2014 compared to the second quarter of 2013. This increase was principally a result of improving the mix of its sales and, to a lesser degree, price increases, most notably for shingle and peeler logs. As in the first quarter of 2014, the company continued to reduce the percentage of pulp log sales, from 32% of its total log sales in the second quarter of 2013 to 22% in the second quarter of 2014, while at the same time increasing its domestic and export log sales. Total lumber production was 3% higher in the second quarter of 2014 compared to the same quarter a year ago, with increased productivity more than offsetting the impact of running fewer operating days. Log costs in the second quarter of 2014 increased as a result of higher stumpage rates and increased harvesting costs. Other cost increases were incurred in the current quarter in the pursuit of higher value log mix, including a 76% increase in the volume from helicopter logging compared to the second quarter of 2013. In addition, we invested $2.0 million more in road construction during the second quarter of 2014 compared to the same quarter last year. Net income for the second quarter of 2014 was $29.2 million, or $0.07 per share as compared to net income of $35.5 million, or $0.08 per share, for the same period of 2013, and to $23.6 million, or $0.06 per share, for the previous quarter. Its liquidity position remains strong. At June 30, 2014, the company had total liquidity of $165.6 million, compared to $125.9 million at the end of 2013. The increased liquidity in the first half of 2014 primarily resulted from cash generated by operations. Its strategic capital plan continues to progress in accordance with expectations and will build on previous investments at the Saltair, Cowichan Bay and Alberni Pacific sawmills. Its Board of Directors recently approved an additional $6.6 million investment at the Duke Point sawmill, giving a committed capital investment of $8.0 million at the facility. In addition, it commenced work on a $2.3 million investment to its barge loading facility, which will reduce the costs of accessing key North American and export markets. During the second quarter of 2014, its margin improvement plan program contributed a further $5.8 million in annualized margin enhancements. These benefits mainly relate to improvements in timberlands operations, changes in product mix to create higher margins at its sawmills, and other logistics and procurement initiatives. On July 14, 2014, Western signed a memorandum of agreement with the United Steel Workers on a five- year collective agreement, largely based on a previously negotiated agreement with BC interior forest companies. Ratification of this agreement is expected in the next few weeks. In the second quarter of 2014, the company continued to provide returns to its shareholders through its dividend program, paying $7.9 million or $0.02 per share to shareholders on June 20, 2014. Total dividend payments in the first half of 2014 amounted to $15.7 million, or $0.04 per share. Operating Results Second quarter 2014 Lumber revenue in the second quarter of 2014 grew to $207.9 million, 15% higher than in the second quarter of 2013. This increase was driven by an 11% increase in shipment volume combined with higher realized prices. Its average realized price for lumber during the second quarter of 2014 was 4%, or $33 per thousand board feet, higher than in the second quarter of 2013. This reflects both the benefit of a weaker CAD, and actual price increases for its Western Red Cedar ("WRC"). Partially offsetting these benefits was a lower value mix of its sales, as it sold a greater volume of commodity lumber, and proportionately less lumber into the Japanese market, in the second quarter this year compared to 2013. Log revenue in the second quarter of 2014 was $71.8 million, an increase of $4.8 million, or 7%, over the second quarter of 2013. Its shipment volume in the current quarter was 1% higher than in the same quarter last year. The main driver of the increased log revenues in the current quarter was product mix related. The company sold 20% more of higher value export logs and shingle logs, and 31% less of lower value pulp logs. With the exception of higher prices for shingle and peeler logs, prices were generally similar compared to the same period last year. By-products revenue in the second quarter of 2014 was $16.5 million, $1.6 million higher than the $14.9 million reported for in the same period in 2013. This increase was the result of 11% higher average realized chip prices this quarter, combined with a 2% increase in the volume of chips sold compared to the second quarter of 2013. The increase in chip prices over the two quarters reflects an increase in the market price of pulp, to which prices received are tied by formula. Adjusted EBITDA of $40.9 million for the second quarter of 2014 compares to $44.9 million reported in the same quarter last year and to $32.8 million in the first quarter of 2014. Results for the second quarter 2014 benefitted from improved sales volumes and prices for its products, and the favourable impact on its revenues of the weakening of the CAD against the US dollar ("USD"). The CAD was, on average, 7% weaker relative to the USD during the second quarter of 2014 compared to the second quarter of last year. The decline in adjusted EBITDA compared to the same quarter a year ago primarily reflects cost increases in its timberlands operations. Its log harvest volume for the current quarter was 1.5 million cubic metres, which was 3% higher than the volume harvested in the second quarter of 2013. Its overall harvest costs were higher in the second quarter of 2014 compared to the second quarter last year. This increase resulted from a variety of factors including increased stumpage rates, and higher logging costs. Costs were also impacted in the second quarter of 2014 relative the second quarter last year as the company increased the level of heli-logging by 76% to achieve a higher value log mix. It also invested more on construction of new logging roads, which were expensed in the current quarter. Total lumber production for the second quarter of 2014 was 237 million board feet, 3% higher than during the second quarter of 2013. The increased volume occurred despite downtime taken at its mills following the tragedy at its Nanaimo sawmill in April. An increase of 4% in mill productivity, as measured on a production per shift basis, compensated for the lower number of shifts operated over the respective quarters. The improved productivity was largely driven by its Saltair sawmill, following its capital program undertaken in 2013. Freight costs in the second quarter of 2014 were $25.1 million, which was $3.4 million more than those incurred in the second quarter of 2013. This increase is the result of an 11% increase in shipment volumes of lumber in the current quarter as compared to the second quarter of 2013, and the impact of the weaker Canadian dollar in the current quarter. Partially offsetting these increases were lower log freight costs. Selling and administration expenses in the second quarter of 2014 were $8.1 million, compared to $8.0 million in the same quarter in 2013. As a percentage of revenue, its selling and administration costs were 2.8% for the second quarter of 2014, a reduction from the 3.0% reported in second quarter of 2013. Year to date, June 30, 2014 Total revenue for the first half of 2014 grew to $542.2 million, which was 9% higher than the first half of 2013. Lumber and by-product revenues were up by 13% and 17%, respectively, while log revenue was down by 3%. Its lumber shipment volumes and average prices realized were both higher by 6%, and by-product prices were 14% higher, driven primarily by higher chip prices in the first half of 2014. Despite realized average log prices being 7% higher during the first half of 2014, overall revenue declined as shipment volumes were lower than for the first half 2013. The reasons for these changes over the respective six month periods are similar to those discussed in the second quarter summary above, and reflect improved markets for its products and the continued efforts by Western to maximize adjusted EBITDA by channeling its products into higher margin markets. The CAD was, on average, 8% weaker relative to the USD during the first six months of 2014 compared to the same period in 2013, which also contributed to the improved prices realized for its products. Adjusted EBITDA for the first six months of 2014 was $73.7 million, compared to $76.8 million in the first six months of 2013. While total revenues for the first half of 2014 were 9% higher than the same period in 2013, log harvest cost increases led to a reduction in adjusted EBITDA margins from 15.5% in the first half of 2013 to 13.6% in the same period of 2014. Lumber production for the first half of 2014 was 6% higher than in the first half of 2013. The majority of this increase was in the first quarter of 2014 and was achieved mainly at its Saltair and Cowichan Bay mills. Overall mill productivity for the first half of 2014 was 4% ahead of the same period in 2013, which primarily reflects the beneficial impacts of the capital improvements implemented at the Saltair sawmill during 2013, combined with operating improvements at its mills. Its total log harvest for the first half of 2014 was 2.8 million cubic metres, marginally lower than the volume in the same period last year. Harvest costs were higher in the first half of 2014 as a result of increased stumpage, increased harvest operating costs, increased use of heli-logging, and the construction of more spur roads. We approximately doubled the level of heli-logging in the first six months of 2014 and invested $4.0 million more in the construction of spur roads compared to the first half of 2013. Selling and administration costs in the first half of 2014 were $17.9 million, which was $1.9 million more than in the same period last year. Most of the increase relates to performance related compensation. The cost for the six months as a percentage of revenue at 3.3% remains relatively consistent year over year. Restructuring Costs In the second quarter of 2014, an expense of $1.2 million was recognized following the arbitrated settlement of a union grievance relating to the 2011 curtailment of the Duke Point and Nanaimo sawmills. Strategy and Outlook Western's strategy, which is designed to maximize product margins while prudently increasing its sales volume, continued to progress during the first half of 2014. Key operational priorities for the strategy in 2014 include: -- Increasing log availability through improved utilization and accessingmore volume on the open market-- Improving productivity through increased machine utilizationefficiencies-- Rationalizing its lumber marketing programs by mill to drive highermargins Market Outlook During the second quarter of 2014 the rate of new home construction in the US leveled off at a pace of just under 1 million seasonally adjusted starts, an increase of 8% over the second quarter 2013. For the balance of 2014, its outlook for US housing growth is relatively flat. In the medium-term we expect gradual improvement in the US new home construction and the repair and renovation segment, which should drive lumber demand higher. Over the longer-term, constrained supply of Canadian softwood lumber due to BC's mountain pine beetle infestation and reduced allowable cut levels from eastern provinces, along with an increase in worldwide demand for lumber, are expected to lead to improved pricing for logs and lumber. We benefited from strong demand for our cedar products in the second quarter of 2014, which increased over 2013 levels. Continued robust demand and limited log and lumber inventories are expected to support stable pricing for WRC as we move through the traditionally slower back half of the year. Demand for lumber in Japan is currently being negatively impacted by a combination of seasonal weakness and reduced housing starts due to the increase in consumption tax introduced in April 2014. In the event that this trend worsens, we will re-evaluate its market options and adjust operating levels accordingly. Niche lumber markets continue to improve heading into the second half of 2014, driven by the improved US repair and renovation segments. Realized prices for commodity lumber in the first half of 2014 increased year-over-year, but softness in SPF commodity lumber demand will limit the company's ability to improve prices in the second half of 2014. High log inventories in China have resulted in reduced export log prices. We expect export prices to stabilize over the third quarter and demand to return as inventories come into balance. The domestic log market is expected to remain strong through the third quarter. We anticipate pulp log pricing will improve through the third quarter due to increased competition from pulp companies for open market supply. Strategic Capital Plan Update Its strategic capital plan continues to make steady progress: -- The Cowichan Bay log auto-rotation project was successfully installedand fully operational on July 28, 2014.-- The first phase of the Duke Point sawmill modernization was completed onJuly 29, 2014, and its Board recently approved an additional $6.6million phase two investment at the mill to increase productivity andconsolidate production.-- The final phase of the Saltair sawmill project, which involves theinstallation of a new log in-feed, will commence during the thirdquarter of 2014 and is expected to be complete by the end of this year.-- In July, 2014, work commenced on a $2.3 million project to enhancethe efficiency at the Duke Point barge loading facility, which willreduce the costs of accessing key North American and export markets.-- The recently installed Alberni Pacific sawmill autograder continues toexceed operating expectations, and we continue the evaluation of itsother mills for similar autograder installations.

Wood Panels

Norbord shipments up 10%

July 29, 2014, Toronto - Norbord Inc. reported EBITDA of $33 million in the second quarter of 2014 compared to $27 million in the first quarter of 2014 and $102 million in the second quarter of 2013 (prices are in US dollars). The year-over-year change is due to the exceptional North American OSB prices in the first half of 2013. North American operations generated EBITDA of $24 million in the quarter versus $17 million in the prior quarter and $92 million in the same quarter last year. European operations generated EBITDA of $12 million in the second quarters of both 2014 and 2013 versus $13 million in the prior quarter. "In North America, homebuilding activity continues to improve. But the pace has been held back by labour availability and a lack of entry-level buyers and OSB prices have been disappointing," said Peter Wijnbergen, President and CEO. "However, we are not discouraged. We always expected it would take time for OSB demand growth to absorb the additional capacity that has been ramping up since early 2013. At Norbord, demand from our key customers in all core segments - new home construction, home improvement and industrial - continues to grow, driving 10% higher shipments so far this year. At the same time, our OSB cash production costs are declining due to improved productivity and lower raw material usages." "European panel markets were a bit slower in the second quarter, reflecting a pullback from a particularly robust first quarter. Our business there performed well once again and our panel mills are operating at record production levels. I expect we will continue to generate solid results through the second half of the year." Norbord recorded earnings of $11 million or $0.21 per share ($0.20 per share diluted) in the second quarter of 2014 compared to $7 million or $0.13 per share (basic and diluted) in the prior quarter and $53 million or $1.00 per share ($0.99 per share diluted) in the second quarter of 2013. There were no one-time items in either the current or comparative quarters' earnings. Market Conditions In North America, year-to-date US housing starts were 6% higher than the same period in 2013 and permits were 5% higher. The consensus forecast from US housing economists is continuing to decline and currently stands at 1.05 million starts in 2014, which would still be a 13% improvement over last year. North American OSB prices were relatively stable and continued to trade in a tight range in the second quarter. The North Central benchmark averaged $219 per thousand square feet (Msf) (7⁄16-inch basis), unchanged from the previous quarter and down from $347 per Msf in the same quarter last year. In the South East region, where more than half of Norbord's North American capacity is located, benchmark prices averaged $199 per Msf, compared to $193 per Msf in the prior quarter and $313 per Msf in the same quarter last year. In Europe, panel markets slowed in the second quarter as strong demand on the Continent in the first quarter due to unseasonably mild and dry weather pulled homebuilding activity forward. Average panel prices held firm in the quarter, unchanged versus the prior quarter and 2% higher than the same quarter last year. Performance In North America, Norbord's OSB shipments increased by 11% versus the prior quarter, 12% versus the same quarter last year and 10% year-to-date, primarily due to higher demand from all customer segments. The North American OSB mills produced at approximately 85% of stated capacity (including the two curtailed mills in Huguley, Alabama and Val-d'Or, Quebec), compared to 80% in the prior quarter and 75% in the same quarter last year. The increase versus both comparative periods is due to improved mill productivity. The year-over-year improvement also reflects the additional volume from the Jefferson, Texas mill, which restarted in the third quarter of 2013. Norbord's North American OSB cash production costs per unit (before mill profit share) decreased by 4% versus both the prior quarter and the same quarter last year. Lower raw material usages and higher production volume more than offset higher raw material prices. Excluding the impact of higher raw material prices, unit costs decreased by 6% year-over-year. As previously announced, Norbord has begun rebuilding the press line at the curtailed Huguley, Alabama mill to prepare it for restart. The company has not set a restart date and will do so only when it is sufficiently clear that customers require more product. Norbord does not currently expect to restart its curtailed mill in Val-d'Or, Quebec in 2014, but will continue to monitor market conditions. In Europe, Norbord's shipments increased 3% year-to-date, but were 9% lower versus the prior quarter and 3% lower than the same quarter last year. The company's panel mills achieved a second consecutive quarterly production record. The European mills produced at approximately 105% of stated capacity in the quarter, compared to 110% in the prior quarter and 100% in the same quarter last year. Norbord's mills delivered Margin Improvement Program (MIP) gains of $6 million in the first half of 2014 from a richer value-added product mix, improved productivity, lower raw material usages, lower labour and maintenance costs and the timing of maintenance shuts. Capital investments totaled $42 million year-to-date and the full year target remains at $65 million. This year's capex target includes the rebuild of the wood handling end at the Joanna, South Carolina mill and a continuation of strategic investments across the Company's other mills to improve productivity and reduce manufacturing costs. It also includes approximately $10 million for preliminary work to rebuild the press line at the mothballed Huguley, Alabama mill. Further spending to prepare this mill for restart has been deferred to 2015. Operating working capital was $96 million compared to $93 million in the prior quarter and $86 million in the prior year. Working capital increased year-over-year due to the foreign exchange translation impact of a stronger Pound Sterling relative to the US dollar, as well as higher inventory and maintenance supplies on hand for annual maintenance shuts planned for the third quarter. At quarter-end, Norbord had unutilized liquidity of $425 million, consisting of $83 million in cash and $342 million in unused credit lines. The company's tangible net worth was $453 million and net debt to total capitalization on a book basis was 44%. Both ratios remain well within bank covenants.

No patent for wood grain

July 21, 2014 – Laminate designs based on nature cannot be copyrighted, according to a lawsuit between U.S. laminate flooring distributors Mannington Mills and Home Legend. Mannington sued Home Legend for copying its patented approach to a maple floor pattern but the judge said Mannington had tried to reproduce the wood grain, which occurs naturally and cannot be covered under copyright protection. For more information go to:


UCS opens new Edmonton facility

July 16, 2014, Edmonton – Since its 1999 start in Calgary, under the leadership of Jeff Floyd (Alberta Division Manager) Upper Canada Forest Products has continually grown its market presence and scope in Alberta. In 2007 it acquired Cambium Forest Products, doubled the size of its Calgary warehouse in 2013, acquired Reimer Hardwoods of Alberta earlier this year, and now has opened of a new LEED certified warehouse facility in NW Edmonton. Edmonton has a vibrant and established millwork and cabinet industry and is a growing metropolis of almost 1.2 million people. Edmonton is also the stepping off point to many northern Alberta communities. UCS Forest Group is North America's premier importer, exporter, and distributor of specialty products serving discerning customers in the architectural woodworking, commercial and residential furniture, and cabinet-making industries. UCS does business as Sierra Forest Products in the United States, Upper Canada Forest Products in Canada, UCS Global internationally and A&M Wood Specialty.

Stella-Jones uses customized loaders

July 2, 2014  - While the Stella-Jones pole processing plants in Prince George and Galloway, British Columbia both report to North America's leading provider of utility poles and railway ties, each facility is responsible for managing its own operation independently. When it came to choosing a replacement for their aging log-handling equipment, the two site managers, working 500 miles apart, came to the same conclusion. Today, the Prince George and Galloway facilities are both running new purpose-built SENNEBOGEN 830 M-T material handlers. Bob Stewart was the Plant Manager in Prince George when the purchase of their 830 M-T was proposed to head office. "We looked at 3 or 4 different makes of machines last year, made our decision on Sennebogen and put together the business plan to acquire it." In Galloway, meanwhile, Richard Harkies was also shopping for new equipment. "We had already looked at the other two big names in material handlers," he recalls. "Then Tom Truman (from the Sennebogen dealer, Great West Equipment) came by and took us to see a Sennebogen demonstration in Lavington. We hadn't actually heard of Sennebogen before then!" Before the year was out, Galloway had become a Stella-Jones operation and the purchase of the machine went ahead. Great West Equipment delivered the first one of its 830 M-T's to Prince George in January, and the second was delivered to the Galloway Mill in June. The 830 M-T is a purpose-built material handler for trailer pulling. It has an undercarriage and transmission configuration that's specially built to pull over 100,000 lb. log trailers. The two material handlers were then fitted with Rotobec log grapples. They were also customized to widen out the tines and the tips to minimize damage to the wood. Each was then equipped with a live heel. While the two sites differ in some ways in their specific application, their managers are equally satisfied that the 830 M-T was the right way to go. The Prince George plant processes both utility poles and railway ties, so its log handler has to manage moving and loading square timber as well as round wood. "We stack the ties in packs of 25 for air seasoning," says Bob Stewart. "Then we load the bundles onto gondolas for delivery. The 830 M-T pulls a tridem trailer loaded up to 75,000 lbs. It could be a larger sized machine than we really need, but we wanted to be prepared for future demands, too. We anticipate that we'll get 10 to 15 years of service from this unit." "It has a lot of hydraulic power," he continues. "It takes a fine touch to grab a large load without damaging the wood. These controls are very user-friendly and the hydraulics are very responsive. We also find that the stance of the machine, with its wide wheelbase, is much better for getting around even in soft ground than what we experienced before." Richard Harkies also cites improvements in mobility among the advantages of the 830 M-T. "We have to drive a half-a-mile from one end of the yard to the other. With a separate transmission on each axle, it pulls smoother and it doesn't shift as hard and it's more stable." Harkies notes that the extra stability is especially helpful when the operator's cab is elevated. "The high-lift cab is way better for loading rail cars, because you can see the top of the load. The operators can set it at the best height, for comfort, for whatever they are doing. In the spring, after the snow, you can get potholes, which can make it a little rough up there! The wide stance and pneumatic tires smooth out the ride for them." Stewart and Harkies are both confident that their concerns about the future reliability of their equipment have been answered. Sennebogen's 100,000 sq. ft. headquarters near Charlotte, NC maintains the largest inventory of material handling parts in North America. Great West Equipment, their Sennebogen distributor, also keeps a large stock of off-the-shelf parts for their customers. And Stewart acknowledges the importance of Great West's experience in the industry. "We have been dealing with (Great West representative) Dillon Healey for 8 or 9 years. We always feel that we get a good deal and they're always very helpful making sure that our equipment is perfectly suited to our application." The stability and smooth pulling power of the 830 M-T is well suited to the 1/2 mile circuits in the log yard.

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