British Columbia's coastal wood producers would be 'in an amazing place' if recoveries in U.S., Japan markets dovetail with growth in exports to China

Wendy Lisney

LOS ANGELES , March 27, 2012 (Industry Intelligence) – British Columbia’s coastal forest products industry would be “in an amazing place” if a recovery in U.S. housing coincided with better market prospects in both Japan and China, according to a regional industry leader, the Nanaimo Daily News reported on March 21.

Rick Jeffery, president and CEO of the Coast Forest Products Association, believes the U.S. housing market could take up to four years to recover.

Efforts to increase exports to China have shown some success, but Jeffery said that was still a "tough market" for the province’s wood exporters, and has yet to prove profitable for many already exporting to China.

Meanwhile, Japan’s "post-tsunami" trauma has stalled hopes of expanding markets there for now. Japan is a major market for Western Forest Products’ mill in downtown Nanaimo, the newspaper noted.

"In a few years, we could be in a position where increasing markets to all three of these nations could come together for us, and then we'd be in an amazing place with increasing exports and a recovered industry," said Jeffery. But he cautioned there was “no magic bullet to solve our problems."

Nanaimo’s forest industry has seen a host of mill shuts and workers laid off since the CIPA sawmill closed in 2002 with the loss of about 100 jobs.

In 2005, the Island Phoenix sawmill was permanently closed, costing 120 jobs, the newspaper noted.

In 2008 Nanaimo's two Western Forest Product's sawmills closed, putting more than 300 out of work; and Madill Equipment closed that year, with the loss of about 190 jobs.

In 2010, Western’s mill in downtown Nanaimo reopened with one line, hiring back about 30 workers. And the company’s recent decision to invest C$16 million in its Saltair sawmill - the first commitment of a C$200 million investment it intends to make in its Vancouver Island sawmills during the next three years - is being taken as a positive sign for Western's other mills.

Another Nanaimo wood producer, the Coastland Wood Industries mill, which produces plywood veneer, has run almost non-stop amid the hard times. The mill, which employs about 160 workers, credits its survival partly to having the flexibility to adjust operations to fit demand.

But spokesperson Jack Stephens said markets continue to be tough and that the mill would “continue to struggle until the American housing market sorts itself out."

The primary source of this article is the Nanaimo Daily News, Nanaimo, British Columbia, March 21, 2012.

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