A Change is in the Air
By Bill Tice editor
In mid-January, I visited British Columbia’s capital city of Victoria to take in the annual Truck Loggers Association (TLA) Convention. For those of you who aren’t familiar with the Truck Loggers, they are an industry group that represents the coastal forest community in B.C. by promoting the viability and sustainability of the coastal forest industry.
By Bill Tice editor
That said, you could probably gather that the annual TLA convention has been somewhat subdued for the past few years, as coastal B.C. has been hit harder than most areas by the downturn in the forest industry and the global economy. But this year was different. Instead of feeling like a funeral for an industry that was long gone, this year’s TLA event resembled more of an Irish wake, complete with partying into the wee hours of the morning, boisterous loggers fighting to put in bids for items as part of a charity auction, and an air of optimism that hasn’t been seen for almost five years by anyone in this industry, anywhere.
It wasn’t just at the after-hours events where optimism reigned. The trade show floor was buzzing with enthusiasm for an improving business climate and speaker after speaker, during the daytime sessions, spoke of prosperity returning once again to the coastal industry, of mills reopening, of forest industry jobs returning to coastal communities, and as more than one speaker put it, an opportunity for anyone involved in the coastal logging industry, “to make out like pirates.“ Let’s face it, the coastal forest industry in B.C. has been in a downward spiral for longer than most areas, so if they are seeing the light at the end of the tunnel, there truly is hope for the rest of B.C. and Canada.
So why the difference from just one year ago when this same group was still down and almost out. Most speakers pointed to China. The Asian markets, especially China, are consuming huge amounts of Canadian wood, most of it from B.C., and the volume of exports crossing the Pacific Ocean keeps growing at an astronomical rate.
B.C. Minister of Forests Pat Bell has been a huge supporter of developing the markets in China. He gleefully announced to the crowd at one TLA session that the combined market of China and Japan imported more B.C. lumber in October 2010 than the United States. He said it was a first. The total value of B.C. lumber going to China and Japan in October was $143.7 million. The United States took $124 million of the province’s lumber exports that month.
But it’s not just the B.C. coastal industry members that are excited about this trend. The rest of the province is also reaping the benefits of the new markets, and preparing for what they hope is a return to prosperity. Starting on page 27 of this magazine, we have a report on capital spending in B.C. For those of you who are like me and have been in this industry for some time, you have likely seen the tide roll in and out a few times, so what’s happening is encouraging. And the speed it’s happening at is exciting.
The province’s two largest players – Canfor and West Fraser, have announced $375 million in capital spending between them for the year. Most of that money will be spent on upgrading wood processing facilities. Smaller producers such as Conifex and Interfor have also committed to investing capital in their mills. And even companies that aren’t putting cash into their facilities just yet, are reversing the trend of shutting down mills and are putting people back to work.
So while the United States continues to be plagued by low housing start numbers, high unemployment rates, and a host of other financial hurdles, B.C. and Canada seem to have found a new trading partner that is willing to take as much lumber as we can send. The best part, according to Minister Bell, is that in China, the market is paying more for our lumber than in the United States. Bell says that is not only good for business here at home, but will position Canada well when the next round of Softwood Lumber Agreement negotiations starts up with the United States in 2013 as we will no longer be dependent on one market.
So are we out of the dark days yet? Maybe not quite, but a lot of industry experts seem to think we are well on our way. Let’s hope they are right.
Bill Tice, Editor