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COFI conference to deal with challenges ahead

The Council of Forest Industries (COFI) annual convention, being held April 2-3 in Kelowna, B.C., will be abuzz with discussions about challenges—but they will include good challenges, such as how to meet growing markets in the U.S. and China.

By Paul MacDonald

The B.C. forest industry is now past recovery mode, and is clearly moving ahead and figuring out how to deal with the different challenges that come with an industry on the upswing, such as meeting the needs of growing lumber markets and finding the people to do the logging and man the sawmills in the province.

The industry has a number of positive factors working in its favour, including a lower Canadian dollar, a recovering U.S. housing market, and a still healthy market for lumber in the fast-growing China market.

These and more topics will be discussed at the Council of Forest Industries (COFI) annual convention, which will be held April 2-3 in Kelowna, B.C.

Overseeing the convention will be COFI’s new Present and CEO, James Gorman, who took over last fall from John Allan, who retired last year.

In a province where 95 percent of the forestland is Crown land, Gorman is seen to be a good fit for the job, since he brings extensive public policy and senior management experience to his new role. It’s thought that Gorman’s experience will help shape a solid future for the forest industry, and the dozens of B.C. communities that depend on the industry. And Gorman joined COFI as the industry is on the way up.

“The industry is enjoying some improved times,” says Gorman. He noted the U.S. housing recovery is continuing, with housing starts now around the million starts mark.

“And the growth in offshore markets has been steady. We’ve seen the increased demand for wood products being reflected in lumber prices, and those prices are continuing to improve. When you add to that a falling Canadian dollar, it’s a good time to be in the lumber export business.”

Gorman said there have been some dramatic positive changes in some overseas markets for B.C. forest products, notably in China. “If you look at China alone, the numbers are quite staggering.”

In the first 10 months of 2013, the value of total softwood lumber exports to China reached $1.17 billion, exceeding the previous record set in 2011 when softwood lumber exports to China totalled $1.1 billion for the entire year. B.C.’s October shipments of lumber to China also broke new records for monthly volume (865,000 cubic metres) and value ($145.5 million).

The value of lumber exports to Japan and the U.S. to the end of October also have surpassed recent years’ totals. Softwood lumber exports to the U.S. were at $2.13 billion (compared to $2 billion for all of 2012), and to Japan at $703 million (compared to $674 million for all of 2012). The U.S., China and Japan are B.C.’s top three markets for softwood lumber.

The global economic outlook will be addressed by Patricia Mohr, vice-president, Economics and Commodity Market Specialist with Scotiabank, at the COFI conference.

Lumber markets are good, but Gorman noted the industry will also be discussing issues of concern at the COFI conference.

“There are some excellent things going on, but there are some challenges, too,” he said.

Included in the challenges are how the industry is going to deal with the drop in the timber harvest in the B.C. Interior, due to the mountain pine beetle. “I think the AAC piece is a significant challenge. I think what the industry needs is certainty around timber supply, and we need to work closely with government on that. It’s a priority for us because it allows us to plan, it allows government to plan and it allows B.C. communities to plan.”

The Interior timber situation is sure to be a topic of discussion on the CEO Panel, on the second day of the COFI conference.

Also of high importance will be the issue of safety in the industry, especially on the mill side, following the explosions/fires at the Babine Forest Products mill in Burns Lake and Lakeland mill in Prince George in 2012. A session is devoted entirely to safety at the conference, with representatives of the BC Safety Authority, BC Forest Safety Council and Weyerhaeuser Canada on the panel.

“The top priority of B.C. wood product manufacturers is to ensure our employees have a safe working environment,” said Gorman. “We’re working with employees, with unions, with the province’s safety organizations—such as WorkSafeBC—and insurers to identify and address any potential safety hazard, including combustible wood dust.”

Gorman noted that CEOs of the major forest products companies have combined forces on the safety front with the Manufacturing Advisory Group to look at dust issues related to combustion, from both green and dry wood, and identify best practices for dust control. “They’ve developed an industry-wide standard that can be used to provide some independent assurance of mill safety.”

Gorman added that the industry is making significant capital investments in ventilation systems and dust control equipment. “These are all important steps to improve our safety performance.”

Of growing interest to the industry is the impending shortage of skilled labour, which will also be the topic of a session at the COFI conference.

“Our industry, like others, has an aging workforce and we are competing with other industries for high demand skilled workers, and it’s right through our whole supply chain,” said Gorman. That extends from truck drivers to the people who work in the high tech mill operations that are now common to modern sawmills, to saw filers.

The panel will address how the industry is dealing with this, but Gorman noted that COFI and the industry are working to take a more “hands-on” approach. “We’re being more active with schools and talking with young people about a career in forestry, and building programs with post secondary institutions like the University of Northern B.C. and the College of New Caledonia and others that allow students that have an interest in forest related jobs in high school to be able to ladder into these post-
secondary institutions.”

COFI conference largest industry gathering in the West

The Council of Forest Industries’ (COFI) annual convention is the largest gathering of the forest sector in Western Canada. It attracts industry CEOs, vice presidents and senior managers from North America and offshore, senior representatives from customers, suppliers, financial institutions, law firms and representatives from all levels of government.

The area represented by COFI is the largest softwood producing region in Canada and accounts for almost half of Canada’s lumber production.

Of high interest to attendees is the exhibition portion of the convention, which will have more than 35 companies represented (see exhibitor list on this page 16).

The convention attracts 400 to 500 delegates and the Delta Grand Okanagan Resort and Conference Centre in Kelowna will be hosting the 2014 convention.

The list of speakers at the COFI conference includes Steve Thompson, B.C. Minister of Forests, Lands and Natural Resource Operations, Ken Shields, CEO and President of Conifex Timber and Chris McIver, vice-present of lumber sales and corporate development at West Fraser Timber.

For an updated list of speakers, and convention information, please refer to the COFI web site at www.cofi.org