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While industry spokespersons are being tight lipped about progress in softwood lumber negotiations, rumours abound.

Last Friday, word circulated that Canadian Minister of Foreign Affairs Christina Freeland and United States Secretary of Commerce Wilbur Ross “shook hands” on a ten year Softwood Lumber Agreement restricting market share. This rumour seemed to be congruent with perceived political motivation to achieve a managed trade agreement ahead of potential NAFTA negotiations. By Monday however, a declared state of emergency due to mega-fires in B.C. superseded quota chatter. Then CIBC Capital Markets cautioned that any proposed settlement could be vetoed by the U.S. Lumber Coalition. The rumour fizzled Monday afternoon when in a Madison’s Lumber Reporter follow-up, we were told a source close to the U.S. Lumber Coalition had cleverly confirmed that Minister Freeland and Secretary Ross “surely shook hands” on Friday but “did not shake hands on a deal”. In an update just this afternoon, CIBC Capital Markets noted the framework of the rumoured “handshake deal” was almost identical to a proposal the two sides were reportedly close to agreement on two weeks ago before it was rejected by the Coalition.  CIBC estimates the probability of an agreement between the two countries by the end of August at “greater than 50%”.

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As recently as last Thursday, the only talk about forest fires in this province was about how few were burning (“three or four”). Suddenly 140 fires started Friday, followed by nearly 100 more Saturday, and a few dozen more Sunday. It’s interesting to learn here how a below-average fire season in 2016 and an unseasonably wet spring in 2017 may have made the forest more susceptible to fire, fueling the unprecedented spread over the weekend. Mills watch with anxiety as the wildfire season, just begun, is impacting Interior communities and forest operations. The Vancouver Sun reports West Fraser, Tolko, and OSB manufacturer Norbord are among the companies that have suspended operations around 100 Mile House and Williams Lake, with 1,000 employees from West Fraser alone off work due to the closures.

Lumber Trader’s Witch Hunt!

The Information Age has seemingly spawned increasingly polarized views on pretty much everything – exposing even close ties between supplier mills and wholesalers, some with ties to blogging. Fake news occasionally rears its ugly head. Reg Foot of Carrier Lumber is about to experience this when the B.C. Wholesale Lumber Association (BCWLA) honours him as The 2017 BCWLA Lumberman of the Year this week. We posed ten questions to Reg in advance of Thursday evening’s gala at the Terminal City Club in Vancouver:

1. How did you get into the business?
Started playing squash with Terry Kuzma (previous Carrier Lumber’s Woodlands Manager) about 20 years ago and he asked if I would ever be interested in a career change.. the rest is history.

2. When did you join Carrier Lumber and how long have you been Lumber Sales Manager?
Joined Carrier in September ’99 under the direction of Ron Gettling, Sales Manager and became sales manager in April, 2002.

3. Any mentors?
Absolutely.. Gord Wilkinson – my first sales manager when I was in newspaper advertising sales. Gord gave me my first break into sales and taught me some foundational sales techniques that I still practice today. Curt Garland, President of Lomak Bulk Carriers Corp – this was my second job in sales. Curt was instrumental in helping me transition from retail sales to an industrial sales environment. Ron Gettling, retired sales manager of Carrier Lumber. Ron taught me the finer points of mill lumber sales and its time-honoured traditions.

4. Others besides bloggers who have had a positive influence on your career?
My wife Sylvia, for supporting me throughout all the trials and tribulations of the lumber industry and for being my soundboard on the challenging days and helping me stay focused. Bill Kordyban, President of Carrier Lumber, for showing me resiliency, loyalty, and calmness in spite of some major market challenges.

5. What’s the biggest change you’ve seen in the industry?
Technology has really advanced the way we manufacture lumber, allowing us to be competitive in very challenging markets. As far as lumber sales, technology has changed the way we confirm orders, but thankfully it has not replaced the power of a customer-mill relationship. I hope that never happens.

6. What’s the most exotic destination you have shipped lumber to? 
Mongolia

7. How’s your squash game?
Limping along.. literally.

8. What do you fear most about being subject of the BCWLA Roast on Thursday evening?
No one will show up.

9. Can you describe why some consider the Roast merely to be a witch hunt, unlikely to expose positive details of your distinguished lumber career, that, with humility, you have heretofore been seeking to cover up, according to Carl Bernstein?
I am totally OK with a witch hunt. It is more entertaining to hear about a person’s failures than to listen to all the wonderful accomplishments. Just ask TMZ or the National Enquirer for further proof.

10. Please tell us why even an arms-length association you might enjoy with BCWLA distributors should not be a subject of investigation under terms of NAFTA, or, at very least, subject to renegotiation?
???? – next question.

BREAKING NEWS

Some of us might wonder if the North American Wholesale Lumber Association risks upstaging CNN and Wolf Blitzer with BREAKING NEWS when the 2017 NAWLA Regional Meeting convenes in Vancouver next week. We can’t be sure of that. Although the anticipated public announcement of the U.S. Department of Commerce preliminary CVD ruling April 25th against Canadian softwood lumber imports is expected to draw a full house to the NAWLA gathering two days later, April 27th. An expert panel’s assessment of implications of the preliminary ruling is sure to attract heightened interest:

  • Jason Fisher, Associate Deputy Minister, Forest Sector at B.C. Ministry of Forests
  • Susan Yurkovich, President & CEO, B.C. Council of Forest Industries
  • Duncan Davies, President & CEO, Interfor Corporation

For more information, visit the NAWLA Vancouver Regional Meeting webpage here.

Update from NAWLA (April 25):  The 2017 Vancouver Regional Meeting has reached capacity and is unable to accept additional registrants at this time. The wait list for this event is also now full. Only those who are on the attendee list will be granted access to this event.

2017 COFI Convention – 26 Takeaways

1. Convention buzzwords: shift (in fibre supply), declining (timber quality), instability (of supply), balance, diversification, value, engage, relationships, confidence, communication, connecting, collaboration

2. Most important trend shaping the global environment: dramatic expansion of the global middle class.
Jock Finlayson, Business Council of B.C., bemoaned Canada’s “slow-moving jurisdiction in a fast-moving world.”
The American economy continues to advance. Over the medium term, “B.C. needs to address a number of important structural weaknesses that threaten our prosperity”.

The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people are so full of doubt.
– Burtrand Russell

3. Historical devaluation of the Ruble triggered significant investment in state of the art sawmilling equipment in Russia. Currency-based advantage led to surge in softwood exports to China. Notion that Russia has an aging, limited infrastructure, is wrong. There are no logistical cost issues in Russia.
– Russ Taylor, President, Wood Markets

4. Russia has Forest Stewardship Certification (FSC). “Don’t ask me how.” – Russ Taylor

5. The panel assembled for the International Markets Review was a rare convention disappointment. U.S. homebuilding constraints are well-known. U.S. housing starts forecasts have become tedious. As for China, when Eric Wong, Canada Wood Beijing Office, warned that B.C. is losing softwood market share, no alarm bells sounded at the Vancouver Convention Centre. Growth in demand offshore is “continual” according to Wong, attributed in part to logging bans in China’s “natural forests” (25 million cube/year harvest reduction). Record softwood imports in 2016 in China >32 million cubes. In a post-beetle world, at least one trader was left wondering if B.C. (“the global resource for softwood,” according to architect Michael Green) should just go off the market.

6. India will be the 5th largest consumer market by 2025. 60% of the population in India is <35.
– Peter Bradfield, Forestry Innovation Investment

7. “The concept of innovation is.. what are you going to do with all of this growing information? Big Data connects people, like us, to the brilliance in the room”. Challenges facing the Big Data Revolution: Volume, Velocity, Variety, Veracity.
– Rory Armes, Founder & CEO, Cumul8

8. “Innovative technologies will help attract tech-savy video gamer kids who aren’t considering a resource-based industry.”
Mark Gerberman, AR/VR Strategic Partnerships & Business Development, Finger Food Studios

9. How can we keep better track of our natural resources using emerging technologies? We need better data and better analysis tools.
In the future, drone technology and remote sensing will identify the log and the mill, and determine the optimal products and customers – before that tree is felled. “We’re working to offer the industry a turn-key drone.”
– Mike Wilcox, Co-founder/COO, Spire Aerobotics

10. “It’s Urban Wood Building instead of Tall Wood Building.”
– Michael Green, Principal, MGA 

11. “Instability of (wood) supply makes people step back.” – Michael Green

12. “Changing the public perception about what’s possible.. reshaping public perception.. is the challenge. But it’s really happening. These ideas are not abstract. Thirty storeys? When we do that or will we do that remains to be seen, but it’s possible.” – Michael Green

13. “The construction industry is broken.”
– Michael Green

14. “Here in B.C., we may be making the right products but we need to be part of the right system. The idea is universal. We want to be leaders in becoming part of this ‘system’ thinking.” – Michael Green

15. TOE = Timber Online Education. Open access to leading experts.. “from forest to frame”. Free global education in wood design, construction, policy, markets, ownership, and environmental impact.

16. “We didn’t blockade because we wanted to stop the forestry, we wanted to be a part of it.”
– Chief Derek Orr, McLeod Lake Indian Band

17. “The Tsilhqot’in decision was a game changer. When I first meet with a chief, it better not be to ask to build a road. We’re there to undertake their unique vision for their community. What is your vision? Under-promise and over-deliver. If you don’t honour one of those commitments then your relationship goes backwards.”
– Karen Brandt, VP, Corporate Affairs & Sustainability, Interfor

18. “Engage and engage early. Meaningfully engaging with First Nations is how you build relationships. If you’re too busy to sit down with us, then we’re too busy to give you support.”
– Willie Sellars, Councillor, Williams Lake Indian Band

19. “I like to think Prince George is the Bio Energy capital.”
– Lyn Hall, Mayor, City of Prince George, who confirmed the COFI Convention returns to PG next year.

20. “The urban and rural connection, not the urban and rural divide.”
– Greg Moore, Mayor, City of Port Coquitlam
21. “Reinvesting in our business to innovate and modernize the technology in our mills isn’t about making more lumber. We’re not going to make more lumber. We’re going to make more value. Industry and government need to get together to get more value out of a scarce fibre resource.”
– Ted Seraphim, President & CEO, West Fraser

22. “How to run at two shifts efficiently instead of three shifts is the challenge. Three shifts are not possible.” – Nick Arkle, Co-CEO, Gorman

23. “(The softwood lumber dispute) could lovingly be called a hardy perennial. But it is a mutating form of bacteria that has all but become antibiotic-resistant.”
– David Emerson, B.C.’s Trade Envoy to the United States

24. “The consumer will pay the price.” – Duncan Davies, President & CEO, Interfor

25. “The softwood file is top of mind for the entire government. We have a strong case but that’s cold comfort for the people feeling the pain of the imposition of duties. A good, strong, fair, mutually-beneficial deal is preferable to long litigation. On both sides of the border, trade is central to maintaining standard of living. Trade creates jobs.”
– Kirsten Hillman, Assistant Deputy Minister, Trade Policy & Negotiation, Global Affairs Canada

26. Q: Is a market share-based quota inevitable?
A: “Nothing is inevitable.” – Kirsten Hillman

COFI Countdown

The sold out COFI 2017 Convention kicks off at 6:30pm this evening with an ice breaker in the stunning wood-infused architecture of the Vancouver Convention Centre. The largest gathering of the forest sector in Canada, we’re told over 600 delegates are registered this year, making this the biggest COFI Convention in ten years. The annual meeting brings attention and awareness to the significance of forestry to the economic well-being of the province. This year’s theme is Forestry for the Planet. Forest Products for the World.

The convention’s jam-packed itinerary ensures plenty to capture our attention through Friday. Tomorrow’s keynote speaker is renowned architect Michael Green who will present Increments of Change: from early tall wood buildings to a global movement. I’m also looking forward to the International Markets Review in the morning, and an afternoon CEO panel featuring Nick Arkle (Gorman Group), Duncan Davies (Interfor), Don Kayne (Canfor), and Ted Seraphim (West Fraser). On Friday, David Emerson, BC Trade Envoy to the United States, will discuss Canada’s Trade Negotiations Agenda with Kirsten Hillman, Assistant Deputy Minister, Trade Policy & Negotiation, Global Affairs Canada.

There’s a ton of other interesting panel discussions before we hear from BC Premier Christy Clark, keynote speaker at Friday’s closing luncheon. Speaking of politics, it’s interesting today to look back in the blog archives at Premier Clark’s keynote at the COFI 2013 Convention, a fiery speech which seemingly sparked her campaign’s comeback, leading to a surprise victory in the provincial election the following month.

A good preview of the COFI 2017 Convention is available in the podcast below. It includes a number of hard-hitting caller questions for Susan Yurkovich, COFI President & CEO. My 23 takeaways from last year’s excellent COFI Convention in Kelowna are available here.

Carrier

It’s been said that excellence is the unlimited ability to improve the quality of what you have to offer. Dakeryn’s strong partnered approach in the marketing, re-manufacturing, and distribution of Appearance Grade lumber with western sawmills of excellence is integral to the company’s long association with key producers.

When Carrier Lumber honoured Dakeryn Industries as their “#1 Customer” with a trophy presentation Friday to President Rob Chimko, it reaffirmed the importance of quality as a building block in the lumber industry. As noted on their website, three principles have guided growth for companies associated with the Carrier Group:

  • Innovation in milling technology
  • Community partnerships with aboriginal groups and community stakeholders
  • Responsible management of the forest ecosystem.

Carrier has achieved sound growth over the years by consistently producing high quality lumber, a determination to form long lasting relationships with customers and to provide the best service possible.

Buried Treasure

These days much of what constitutes Vancouver’s crazed real estate scenario is taking shape around the urban False Creek shoreline. Glassed-in condo towers in various stages of completion compete with new, nearby downtown towers, including one named Trump. This week I chanced upon what’s at the bottom of much of what’s going up around False Creek; buried treasure from years gone by. Logs. Huge logs.

In what was the industrial heart of Vancouver, over a dozen sawmills, planing mills, shingle mills and wood preserving plants once operated on this 66 hectare strip of waterfront land called Pacific Place. According to the BC Ministry of Environment, most of this land was created by filling in False Creek with construction debris, industrial waste, and fill from other downtown Vancouver building sites. According to the Pacific Place Remediation Project, studies conducted at Pacific Place show that the volume of fill material is enormous – more than two million cubic metres (enough to fill two BC Place-sized stadiums to the rim). The fill is up to 13 metres deep in some areas along the existing shoreline.

Construction workers and even one pedestrian lumber trader were amazed to note the size of some of the buried logs uncovered during present excavations for The Arc Vancouver condo tower on Expo Boulevard at the foot of the Cambie Street bridge. Interesting stories abound on the history of coastal sawmills and the forest industry that was the early economic engine in these parts.

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~Musical Refreshment~