A message from Pat Bell
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A message from Pat Bell, MLA Prince George North
Hi all,
I had a very good week this week with time spent in Quesnel, Kitimat, Terrace and Prince George. Despite the challenges with the Eurocan closure in Kitimat each of my meetings went well and throughout the week there was a sense of building momentum in the forest sector. Each of my visits were focused on new growth and opportunity in the forest industry and as the week went on the news seemed to get better with announcements of new pellet mills, sawmills re-opening and new investments looking for a home in the BC forest industry. This week I want to focus my attention on the good news indicators.
Have a great week.
Pat
1. According to a report in the Prince George Citizen this week by Gord Hoekstra “Is lumber the oil of the next decade?" asks RBC Capital Markets senior currency strategist David Watt in a recent analysis, noting that it has been oil exports that have underpinned the rising value of the Canadian dollar. Watt noted Shanghai, a city with an estimated population of 20 million, just announced the adoption of a wood building code, which he called a real breakthrough. "This helps bust open the Chinese market for lumber construction products," said Watt.”
2. Continuing in the article Hoekstra says “Companies like Canfor Corp. and West Fraser Timber Co. Ltd. -- both companies with extensive operations in northern and central B.C. -- have signaled an interest in developing a market for lumber in China. Canfor president and CEO Jim Shepard, who made his third trip to China in November, is particularly bullish on the market opportunities in China. "As far as Canada is concerned, I can see eventually China becoming half of our market," Shepard recently told the Business News Network.”
3. In fact Canfor is putting its money where its mouth is with the announcement that it is considering re-opening it’s Chetwynd sawmill. Shepard is expecting to take a recommendation to his Board in the coming weeks.
4. This opening (Chetwynd) would bring the number of restarts in BC to 5. Chetwynd would be joining Canfor Mackenzie, Conifex Fort St James, Interfor Grand Forks and Abitibi Mackenzie as mills that have all re=started operations after indefinite closures.
5. According to a Vancouver Sun story today investors are starting to show their confidence in the industry and especially in BC based companies. “Three Vancouver companies in particular, Interfor, West Fraser Timber and Canfor, have seen their shares jump dramatically since July. Interfor has climbed from $2.30 to $4.95 Friday; Canfor from $4.75 to $7.41 Friday and West Fraser Timber from below $25 to $33.85 Friday.
6. The “Random Lengths” Composite Index added another $4 this week to reach $254 up from $221 a year ago.
7. The Province has signed an Economic Development Agreement with the Red Bluff Indian Band that will enable Red Bluff to develop meaningful employment, as well as help the Province salvage beetle-killed timber in the Quesnel area. The agreement will allow the Red Bluff to harvest 75,000 cubic metres of mountain pine beetle-killed timber per year in the Quesnel Timber Supply Area for the next 15 years. This timber has been dead for several years and consists primarily of pulp-quality stands. Red Bluff, working with National Choice Bio Fuels, will build a new pellet plant to process this low-grade timber into wood pellets, which are considered to be a renewable source of bioenergy. The new plant is expected to be operational by May 2010.
8. The Okanagan Shuswap Forest District is soliciting the public for ideas on innovative uses of wood fibre. The forest district’s goal is to potentially advance new forest economies by improving the utilization of fibre, which includes any or all parts of a tree and/or wood waste. The focus is getting the highest-value product from each log, and looking for opportunities to expand the local forest economy. Part of the Government of British Columbia’s Wood First Initiative is to facilitate the right fibre to the right process, allowing different manufacturers access to the dimensions, species and grades of fibre they need. The ultimate goal is to maximize fibre utilization while balancing the diverse ecological and social values of the land-base. Since this is a Request for Information, there is no guarantee that any submission will result in a tenure being issued. Current fibre availability would typically be most suitable for terms less than 10 years and smaller (less than 100,000 cubic metres) tenures. However, this availability may change over time and should not preclude other submissions. This program will be expanded to other Forest Districts if it is successful.
9. A faster, more efficient permit approval process will allow small-scale salvagers to log dead and dying trees sooner. As a result of a ministry review, processing times for small-scale applications will now be reduced to two working days following completion of any necessary consultations. Previously, turnaround times could take as long as four weeks. Increased emphasis on professional reliance and improved information-sharing will reduce wait times for salvagers. Areas logged by small-scale salvagers generally range from less than one-hectare openings to about 10 hectares. The average small scale salvage opening is less than five hectares. Salvagers log trees that are wind-thrown, damaged by fire, beetle-killed or in imminent danger of being damaged or destroyed by beetles. Over the last few years the amount of timber harvested under the small-scale salvage program has averaged about 1.3 million cubic metres of timber each year. Across the province, the Ministry of Forests and Range processes as many as 800 applications each year. These small-scale salvage opportunities provide jobs for about 1,600 people, with the majority of wood salvaged being sawlogs for local mills. Small-scale salvage is also expected to contribute to the future growth of British Columbia’s rapidly emerging bioenergy sector.
10. A 25-year community forest agreement will encourage the start up of local processing and value-added producers in and around Dunster while putting the management of the area in local hand. The community forest covers a total area of about 20,000 hectares on two parcels of land near Dunster, one on each side of the Fraser River. The 25-year agreement grants the Dunster Community Forest Society the right to harvest up to 15,000 cubic metres of timber per year while preserving recreation and conservation areas within the community forest.
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