Survey Snippet #14 – Mill competition for fibre
Sept. 19, 2016 - It’s a mix of good and bad news for Canadian loggers as far as diversity of markets for the logs they produce. Almost half (48%) report that there are four or more mills competing or sourcing fibre in their region. Only 31 per cent say that there are just one or two mills competing in their region.
On the other hand, it appears that “competing” is a relative term, and depends on where the contractors operate and how large they are. Over half (56%) report that they supply just one or two mills with products, and seventy per cent of the largest contractors ($5M+ range) say that is the case.
The number of mills competing or being supplied by loggers also depends greatly on the region in which they operate. The potential diversity of clients is highest on the BC Coast and Ontario, the only regions where the majority of contractors report that four or more mills compete for fibre (63% and 71% respectively). Less diverse are the BC Interior (44% have four or mills competing), Atlantic Canada (44%), Quebec (42%) and Alberta (30%).
Within these provinces are pockets of very restricted competition, with 40 per cent of Albertan loggers reporting that only one mill competes for the fibre in their region. Twenty-five per cent of loggers in Atlantic Canada say the same thing, followed by 19 per cent on the BC Coast.
Yet when it comes to how many mills these loggers actually sell to, again a different picture emerges. Three-quarters of loggers in the BC Interior report that they sell to only one of two mills (58% sell to just one). Albertan loggers remain restricted, with 60 per cent selling to one or two mills (50% sell to only one), followed closely by the BC Coast where 56 per cent sell to only one or two mills, and Quebec at 48 per cent.
By contrast, loggers in Atlantic Canada (40% sell to two or fewer) and Ontario (31%) appear to have more options.
As far as loggers having a variety of options for their products, east is generally better. A third of Atlantic loggers and 38 per cent of Ontario loggers sell to four or more mills, in part a reflection of species variations in those regions. That is followed by Quebec where over a quarter (26%) sell to four or more. That drops to 21 per cent on the BC Coast and 14 per cent in the Interior who claim the same. No Alberta respondents claimed to be selling to four or more mills.
Look for the 15th and final Survey Snippet next week when CFI shares some of the loggers’ comments and suggestions.
Missed Survey Snippet #13 on what loggers like about their role and what needs to be improved? See it here.
Find more news for the CFI 2016 Contractor Survey on www.woodbusiness.ca and in our enews in the coming months, with a final digital report in October and a summary in the Sept/Oct print issue. Be sure to subscribe to the enews to get every item.
The survey was conducted in April 2016 for Canadian Forest Industries by independent research firm Bramm & Associates, generating over 230 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 50 per cent in Western Canada, 25 percent in Quebec, and the rest found in Ontario, Atlantic Canada, and central Canada. Within BC responses were almost evenly split between the BC coast and Interior. Many thanks to our sponsors for making the research possible – Hultdins, Stihl, Tigercat and Ponsse. Also made possible with support from the Ontario Media Development Corporation (OMDC).
September 19, 2016 By Scott Jamieson
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