Tamar Atik

Tamar Atik

Sept. 28, 2017 - The American government has just appointed Kelly Knight Craft as the new U.S. ambassador to Canada. 

Craft is a republican donor and philanthropist. Her family's fortune is tied to a massive American coal company.  

She will step in to work on the ongoing softwood lumber trade dispute between the United States and Canada. | READ MORE
Sept. 20, 2017 – President Trump’s campaign to put "America First" may be backfiring on him where the lumber industry is concerned.

Lumber prices have surged and costs have increased for American buyers, while Canadian producers are benefitting from a profit boost.

At a time when the U.S. is dealing with the aftermath of Hurricanes Harvey and Irma, higher lumber prices are making re-building even more challenging for Americans who have lost their homes.

The U.S. Department of Commerce added preliminary countervailing duties on Canadian softwood lumber imports heading to the U.S. in April 2017. They ranged from three to 24 per cent across Canadian lumber companies and further increased in June.

Tensions between Canada and the U.S. have escalated with this new development.

Read the full story by Bloomberg.
July 27, 2017 - Tolko has ordered two pocket batch feeders to upgrade its OSB line at its re-opened High Prairie, Alta., mill.

The OSB mill was restarted in June 2017. It had been closed since 2008 prior to that when the North American housing market fell and forced the mill to shut down.

Production is expected to resume in the first quarter of 2018.

“We are confident that current improvements in market conditions are sustainable and that customer demand for Tolko oriented strand board products will remain strong,” said Tolko president and chief executive officer Brad Thorlakson in a release. 

Tolko has ordered the pocket batch feeders from Surrey, B.C.-based equipment manufacturer Kadant Carmanah Design. 

“We’re very happy to see this mill resume operation and to be awarded the order for critical equipment for the OSB line upgrade, said Kadant Carmanah president Michael Colwell. “Tolko and Kadant Carmanah share a long history of partnering to make the best solutions possible.”

Once fully operational, the mill is expected to directly employ approximately 175 people.
July 25, 2017 - B.C. Premier John Horgan is set to meet with U.S. Secretary of Commerce Wilbur Ross in Washington this week to discuss the softwood lumber issue.

Softwood lumber is B.C.'s largest export to the U.S. and Canadian forestry leaders say Horgan is playing an important role in working to resolve the dispute.

President and chief executive officer of the BC Council of Forest Industries Susan Yurkovich said Horgan is "very key on this file."

During his election campaign, Horgan promised to get involved in the softwood lumber dispute if elected.

Read the full story.
July 24, 2017 - Rayonier Advanced Materials (Rayonier) has at last received support from Tembec's two largest shareholders.

Florida-based Rayonier decided to revise its terms on Sunday and increase its offer for the acquisition of Montreal-based Tembec by 17 per cent. Oaktree Capital Management and Restructuring Capital Associates (RCA) said last week that they would not support the takeover unless Rayonier upped its price for shareholders. 

Rayonier is now offering shareholders a choice of either $4.75CAN per Tembec share from $4.05 originally or 0.2542 shares of Rayonier common stock per Tembec common share subject to proration so that approximately 67 per cent of the aggregate consideration is paid in cash and approximately 33 per cent is paid in Rayonier common stock.

“This combination will enable us to sustainably grow our business for the benefit of our customers, employees and communities. We are, of course, pleased with the opportunity to deliver even greater value to our shareholders,” said James Lopez, president and chief executive officer of Tembec.

Oaktree and RCA together make up 37 per cent of Tembec’s shares. Since the acquisition requires support from two-thirds of Tembec’s shareholders, their announcement last week caused tension as they have the power to make or break the entire deal.

“This transaction advances our growth objective to pursue strategic acquisitions where we can leverage our core competencies to provide significant long-term shareholder return,” said Paul Boynton, chairman, president and chief executive officer of Rayonier Advanced Materials. “We look forward to working with Tembec’s exceptional team, unions and other stakeholders to realize the abundant opportunities ahead.”

Rayonier and Tembec announced the friendly acquisition plan in May, promising to keep Tembec’s Canadian operations running.

Tembec shareholders will be voting at a meeting on Thursday.
July 20, 2017 - Montreal-based Tembec's acquisition by Florida-based Rayonier Advanced Materials is not running as smoothly as the two groups initially hoped. 

Tembec's top two shareholders, Oaktree Capital Management and Restructuring Capital Associates (RCA), are in opposition of the acquisition, citing unfair prices for shareholders. They said they will vote against the takeover next week on July 27.

Oaktree and RCA make up 37 per cent of Tembec's shares. The acquisition requires support from two-thirds of Tembec's shareholders. Read the full story here.
June 22, 2017 - It’s February and -40C outside. You’re starting your workday long before the sun rises, deep in the forest. You will be working on roads that hardly anyone uses, especially now in the dead of winter. Most notably, you’re working alone. If anything were to go wrong, no one would know. Knowing the risks, you go out and start your day because this is your livelihood.
June 9, 2017 – About 100 townhomes will be built in Tianjin, China’s Sino-Canadian Low-Carbon Eco-District using Canadian lumber.

Energy efficiency standards and clean technologies developed by Natural Resources Canada are also being implemented in the CAD$2.5-billion project.

Canadian wood product exports to China currently total $1.6 billion since 2002, according to Natural Resources Canada.

Minister of Natural Resources Jim Carr, and China's vice-minister of Housing and Urban-Rural Development Yi Jun met this week to reaffirm the two countries’ agreement to support the development of eco-cities in China using Canadian wood products and technology.

Carr visited the eco-district on Friday. "The eco-district in Tianjin is a remarkable testament to what can be achieved when international partners cooperate in the interest of promoting environmental best practices,” he said in a statement. “Canada is a proud participant in this ambitious project and will be happy to work with China to realize its goal of creating thriving green cities."

Natural Resources Canada said the project will help support jobs in Canada’s $22-billion forest industry by expanding market opportunities for Canadian wood products.

Currently, Canada’s wood products are exported globally to more than 140 countries.
June 5, 2017 - The federal government announced on Thursday that it would provide close to $870 million to support Canada’s softwood lumber producers in the face of taxes imposed by the United States. Preliminary countervailing duties were applied on April 28.

Minister of Natural Resources Jim Carr, Minister of Foreign Affairs Chrystia Freeland and Minister of International Trade François-Philippe Champagne made the announcement in Ottawa.

"This action plan delivers on our pledge to take swift and reasonable action to defend our softwood lumber industry and charts a stronger future for the workers, families and communities that depend on it,” Minister Carr said. “We are prepared to take further action, including additional loan guarantees, to address changing market conditions."

The government’s softwood aid package will provide additional federal loans and the mentioned loan guarantees up to $500 million to forestry companies. It will also increase employment insurance for forestry workers who will lose their jobs as a result of the duties.

The U.S. Lumber Coalition expressed its dissatisfaction with the decision. Spokesperson Zoltan van Heyningen said the U.S. Commerce Department made the right decision by implementing anti-subsidy duties. “Canada continues to push back and refuses to play by the same set of rules,” he said in a statement. “We need a level playing field and must limit the flow of unfairly subsidized softwood shipments flooding the U.S. market, driving American lumber manufacturers out of business."

The U.S. Lumber Coalition claims that more than 350,000 American jobs would be threatened if softwood duties were not imposed on Canadian producers. The Coalition first filed its petition to the Commerce Department in November 2016.

In a contrast to the Coalition’s response, reactions to the news from Canadian forestry groups have exuded gratitude and optimism.

"The federal government has shown real leadership in protecting good resource jobs," said Jerry Dias, president of Canada’s largest private sector union Unifor National. "This is welcome news for dozens of communities that are already feeling the pain of unfair trade sanctions."

"This action is appropriate and recognizes the potential impact of these duties on forest communities, families, and the forest sector," said Paul Whittaker, co-chair of the Alberta Softwood Lumber Trade Council.

As a result of the preliminary duties in April, most Canadian softwood lumber producers were hit with a 19.88 per cent duty.

J.D. Irving, Resolute, Tolko, Canfor and West Fraser were the five exceptions that were investigated separately. Their duties range from three to 24 per cent respectively.

"The Federal Government's renewed support for innovation in the forest sector will deliver tangible benefits in the emerging bio-based economy and to Indigenous communities dependent on the sector,” said Pierre Lapointe, president and chief executive officer of FPInnovations.

According to Natural Resources Canada, Aboriginal people make up nearly five per cent of the total forestry workforce in Canada, compared to three per cent of the workforce in all other sectors. The government is investing an additional $10 million in the Indigenous Forestry Initiative with this aid announcement. In 2015, there were about 9,500 forestry jobs in Indigenous communities.

"This announcement will further develop markets for wood construction and de-risk innovative research of the next generation of technologies, processes and products thereby assuring the economic future of hundreds of communities and an environmentally sustainable forest sector,” Lapointe said.

Prime Minister Justin Trudeau tweeted the government’s announcement of its support writing, “We’re taking immediate action to support Canadian softwood lumber producers and workers.”

“We appreciate that the federal government is standing tall for Canadian forestry communities by launching a comprehensive package in the face of trade actions that we believe are without merit,” said Derek Nighbor, chief executive officer of the Forest Products Association of Canada. “These actions by the federal government are a critical step as we work to secure a strong forest sector of tomorrow.”

The forest industry accounted for $22 billion of Canada’s GDP in 2016. Most of Canada’s softwood lumber exports go to the U.S., with more than 50 per cent coming from B.C.

“This package is a prudent response that can provide both immediate support for workers and communities if required, along with enabling additional investments in longer-term opportunities for the sector,” said Susan Yurkovich, president of the BC Lumber Trade Council. “We particularly appreciate the investment in expanding markets for Canada’s high-quality forest products overseas which will help to further diversify our markets.”

Approximately 230,000 Canadians currently work in the country’s forestry sector. More than 600 mills produce softwood lumber in Canada.
May 26, 2017 – An American high purity cellulose company acquiring a Canadian forestry one, while a potentially new Softwood Lumber Agreement (SLA) looms overhead, has raised a few questions.

Jacksonville, Fla.-based Rayonier Advanced Materials (Rayonier) and Montreal, Que.-based Tembec announced their agreement for Rayonier to acquire Tembec on Thursday.

Speaking from Tembec headquarters in Montreal, Tembec’s chief executive officer James Lopez and Rayonier’s Paul Boynton stressed several times that Rayonier intends to continue all existing Tembec operations and perhaps invest in more.

Boynton also repeated that Rayonier intends to maintain a strong presence in Quebec, Ontario and France, where Tembec currently holds its operations.

The new joint company’s Canadian headquarters will be based in Montreal, while corporate headquarters will be in Jacksonville, Fla.

Choosing not to directly answer a question on whether the new joint company would stand up for Canadian lumber producers’ rights or side with the U.S. Lumber Coalition, Boynton stated only that the company’s best interests would be upheld in the event of a new lumber agreement.

On the topic of guaranteeing Canadian operations of Tembec with a potential SLA coming Boynton said, “We fully recognize there’s some optimization, but we’re going to work on that with both teams… To decide on the optimal structure,” he said. “We have U.S.-based assets, we are acquiring Canadian-based and French-based assets… Our challenge is how do we grow them.”

“We think it’s a very good model that you have here [that can be applied to Rayonier],” Boynton added.

The acquisition is not expected to affect the potential amount the company might pay for softwood lumber duties.

“Here’s the reality,” Lopez said. “Tembec is a public company now and most of our shareholders are U.S.-based now… What’s really important is Rayonier’s commitment to keeping headquarters here in Montreal… They’re going to invest a major amount of their cash flow into Canadian operations.”

Once the deal is closed, Lopez will step down and leave Boynton to lead the new hybrid company. “I think in a case like this it’s best to step down and move on to other things,” Lopez said.

As a combined company, revenue will total approximately US$2 billion.

“This is all about strategic and financial rationale… It’s really a good story… It’s hard to find anything in here you don’t like about it,” Boynton said.

Lopez said liquidity is important in regards to a potential SLA. Adding that the risk to the company this time around is significantly less than the last time a softwood lumber agreement went into effect in 2006 because of smaller lumber operations running today. “While the duties, I'm sure, will be an annoyance they will not affect this company’s ability to maintain a strong balance sheet and continue with capital,” Lopez said.

“It’s the tangible and intangible measures that made this thing a good fit,” Lopez said. “This makes my heart feel good.”

Addressing the curiosity surrounding a U.S. company buying a Canadian forest products manufacturer at such a pivotal time for the two countries’ trade relations, Lopez offered the example of the US$400 million-acquisition of Ontario-based Grant Forest Products by Atlanta-based Georgia-Pacific in 2010 to illustrate that a similar acquisition has been done before.

Employees on both sides were reassured that their best interests are being taken into account. Boynton said people will not lose their jobs adding, “that’s not our plan.” Lopez said more career opportunities are being created.

Shareholders are also expected to benefit with “the right to elect to receive either (i) C$4.05 in cash or (ii) 0.2302 of a share of Rayonier Advanced Materials common stock, for each Tembec common share,” according to a release.  

Boynton said he would like to continue acquisitions going forward in the packaging and forest products areas.

“We look forward to an exciting future ahead - the future is quite bright,” Boynton finished.
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