West Fraser, Weyerhaeuser, Canfor retain top three positions among global lumber companies in 2011 'Billion Board Foot Club' listing; top 11 sawmilling companies produced 14% of world's lumber output

Audrey Dixon

VANCOUVER, British Columbia , April 16, 2012 (press release) – West Fraser, Weyerhaeuser and Canfor remain the top 3 global lumber companies with respectable gains over 2010

The latest WOOD MARKETS annual survey of the "Billion Board Foot Club" that features the largest global lumber producers shows that West Fraser Timber has retained its title of being the world's largest softwood lumber producer in 2011 with 4.91 billion board feet (bf; or 7.9 million m3 net). Second place was close: Weyerhaeuser's softwood lumber operations in the U.S. and Canada exceeded those of Canfor by just 20 million bf (0.5%) in 2011 with 3.59 billion bf.

These and other highlights were released today in the April issue of WOOD Markets Monthly International Report that was researched by the consultants at International WOOD MARKETS Group, Vancouver B.C. The Billion Board Foot Club is based on companies with reported lumber production of more than one billion board feet, nominal basis (or more than about 2.1-2.3 million m3, net basis, for mills outside of North America). This year's list featured eleven companies: five Canada-based companies; four U.S.-based ones; one headquartered in Europe; and one Southern Hemisphere-based firm.

"With global lumber production in 2011 increasing a modest 4% over 2010, the WOOD MARKETS survey provides further evidence that global market demand continues to inch higher in some markets, such as the U.S., while other markets, such as in Europe, are still struggling and that limits output," explained Russell Taylor, WOOD MARKETS' President.

The U.S. housing market recovery is still in its early stages and the sovereign debt crisis in Europe has halted sawnwood production there - this has resulted in a small gain in lumber output of 5% from companies in the Billion Board Foot Club in 2011. However, some companies were able to achieve double-digit gains, signifying that there are opportunities to expand volume in weak market conditions, especially for low-cost producers.

The total output of these 11 companies was 24.5 billion board feet (bf) or 39.3 million m3, net, an increase of 1.15 billion bf from 2010's 23.3 billion bf. All but three companies in the Billion Board Foot Club posted production gains in 2011 over 2010 - the average increase was 5%. The five Canadian companies in the Club increased production at a faster rate than the four U.S. companies in 2011, as they did in 2010, with increases of almost 8% as compared to U.S. companies at just 3%. Production trends for the Billion Board Foot Club are in sharp contrast with the overall industry trends, as total Canadian production increased by only 2.5% in 2011 vs. 2010, while total U.S. production was much higher at 7.6%.

West coast producers in North America continued to benefit from China's expanding demand for lumber in 2011. Western Canadian producers increased their softwood lumber shipments to China to 3.1 billion bf, nominal, allowing for higher production at sawmills. Similarly, U.S. companies increased their exports to China by 190% over 2010 levels, adding to production volumes.

Two non-North American companies made the billion board feet list: number 4 was Stora Enso Timber (based in Finland with operations in nine European countries) and number 10 was Arauco (based in Chile with operations throughout South America).

The top 11 global sawmilling companies captured 14% of the world's lumber output, slightly lower than the 15% share in 2010 and lower again from 17% in 2008. The 162 sawmills of these 11 companies averaged about 144 million bf, nominal, per mill (230,000 m3, net) of lumber production.

Representatives from all of the Billion Board Foot Club will be either speaking or will be attending WOOD MARKETS' 2nd Global Softwood Log & Lumber Conference in Vancouver BC on May 9.

The complete Billion Board Foot Club List and further analysis are available to subscribers of WOOD Markets Monthly International Report.

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