Wood Business

Features Mills Sawmilling
Top 20 lumber producers

Mar. 25, 2014, Vancouver - The latest WOOD MARKETS annual survey of the "Top 20" Canadian and U.S. softwood lumber producers shows modest gains in both countries in 2013 as lumber demand continues to rise in the U.S. and in key export markets. U.S. softwood lumber shipments increased 5.1% to 30.0 billion bf, whereas Canadian production rebounded from minimal gains in 2012 to record an increase of 4.0% to 23.5 billion bf. Corporate acquisitions were again a big part of the story as the Canadian buying frenzy continued in the U.S. South - more than 25 mills have been purchased by Canadian firms in the South that all started in the mid-2000s!

These and other industry highlights were released last week in the March issue of WOOD Markets Monthly International Report. The consultants at International WOOD MARKETS Group in Vancouver B.C. have conducted this survey annually since 1997.

The top 20 Canadian companies increased their market share of total Canadian lumber shipments, rising from 79.8% in 2012 to 80.5% in 2013. Canfor retained its leading position as the top Canadian lumber producer with 4.2 billion bf of production - a 9% gain over 2012. West Fraser held onto the number two spot with 3.6 billion bf of output (+3%). Tolko and Resolute Forest Products remained in the number three and four spots, while Interfor leaped into the number five spot from production gains at its B.C. Interior SPF mills. Together, these five firms produced a total of 12.1 billion bf (51% of Canadian lumber shipments - similar to in 2012). B.C. Interior sawmills continued to struggle with processing dead logs from mountain pine beetle-killed timber (West Fraser and Canfor both announced mill closures for the first half of 2014).

The output of the top 20 U.S. companies rose strongly: from 16.6 billion bf in 2012 to 17.9 billion bf (+8.2%) in 2013. In doing so, these firms increased their market share of U.S. production from 58% to 60%. The five largest producing U.S. companies, Weyerhaeuser, Sierra Pacific, Georgia-Pacific, West Fraser (U.S. operations), and Hampton Affiliates, produced almost 10.0 billion bf or 33% of total U.S. production. Of note, all regions in the U.S. recorded production increases in 2013, with the U.S. West leading the surge in output with a gain of 6.1%; the U.S. South increased 5.1%.

Sawmill acquisitions were active in 2013 with two smaller ones announced in 2014 by Interfor (Tolleson Lumber) and West Fraser (Travis Lumber). Two B.C. Interior sawmills that were destroyed by catastrophic explosions in 2012 (Hampton's Babine and Sinclar's Lakeland mill) have been rebuilt and will be operating in 2014.

With prospects of steady to stronger lumber demand and prices through most of 2014, there is persuasive evidence companies are increasing efforts to expand output by adding shifts, re-opening closed mills or buying sawmills (and expanding these!). More of this is expected for 2014, as sawmill companies continue to gear up for the potential of a lumber "super-cycle" that is expected as early as 2015 but more likely 2016. This will be a key discussion topic at WOOD MARKETS' 4th Global Softwood Log & Lumber Conference in Vancouver BC on May 7.

The complete Top 20 Lists and further analysis are available to subscribers of WOOD Markets Monthly International Report.

For further information or details on the "Top 20" lists, please contact: (1) 604-801-5996