Pine beetle eroding lumber business in Canada

 Wednesday, April 1, 2015

Canadian lumber production companies are struggling to cope with rampant threat of mountain pine beetle that caused less number of productions. Frustrating with the growing problem most companies are relying on sawmills in USA in order to balance production ratio, a recently published survey by International Wood market stated. Top five Canadian companies saw their production here dropped by 3.6 percent over 2013.

 
Among the top five companies Confor, West Fraser Timber and Interor have mills in USA while Tolko industries and Rosolute Forest Product don’t have mills in USA; thus they suffered the most.

 
Confor, West Fraser Timber and Tolko have sawmills in the northern and central interior, the region that was the most heavily affected by the mountain pine beetle infestation.

Confor , West Fraser and Tolko’s business dropped 11 percent, and 3 percent respectively.
British Columbia dropped in 2014 for the first time in five years. Thus, Confor and WestFraser shut down their mils in Quesel and Houston rapidly.

 
“That’s basically a function of the mountain pine beetle and the inevitable change of moving away from utilizing dead wood,” President Russ Taylor said.

 
However, Canadian companies are expanding their business US. West Fraser Timber, no 2 company in Canada is now the fourth largest lumber producer in the USA. It increased its production of Southern Yellow Pine of 15 percent.

 
Taylor said a chief attraction of the U.S. South is its proximity to housing markets. Further, their U.S. production is not subject to trade action. B.C. producers expect to begin paying an export tax of between 5% and 10% for their U.S. shipments beginning April 1, Taylor said, a consequence of a dip in lumber prices below a threshold negotiated in the 2006 Softwood Lumber Agreement.

 
The Canadians began moving into the USA little more than a decade ago with the purchase of two mills in the south of USA by West Fraser.

 
By 2014 Confor, West Fraser and Interfor owned 31 mills combined, producing 3.6 billion board feet of wood. The trend has continued this year, with Interfor buying another for USA mills.

Tags: Confor, Interor, Pine beetle, Rosolute, Tolko, West Fraser Timber