Forestry Investment Blog

By rebuilding their economy from the bottom up a collection of 11 companies operating along Highway 16 are forging a new type of forestry in north-western BC. Called the Northwest BC Forest Coalition they are marketing their individual timber resources as one giant pool of available timber. This has come about due to a stalled forest economy and the fact that their names are unfamiliar and most do not have enough timber on their own to support a mill.

However, according to Forests Minister Pat Bell these independent loggers now have a timber supply of 2.7 million cubic metres of wood a year, which is the largest unassigned timber reserve in North America.

This is enough timber to rival the production of the province’s largest forest companies and could supply a dozen sawmills in China or send a steady stream of wood pellets to European power plants. Energy companies would also be interested in the amount of carbon credits generated by this collaboration.

One by one the major forest companies have closed. The last to close was West Fraser Timber, which closed down its sawmill in Terrace three years ago and its pulp mill in Kitimat last January. The problems they encountered were too many small tenure holders to deal with as well as the low quality hemlock was unable to make saw milling profitable.

“We have no economy to speak of,” said Elmer Derrick, chief negotiator for the Gitxsan Treaty Office and leader of the new coalition. “We have no customers to sell our fibre to, so we have no choice but to work together.”

According to Derrick the coalition is looking at investing in a biofuel plant that would consume all the low quality timber that is uneconomical to harvest. The plan is that if they can develop a long term demand for low value wood for biofuel then they can afford to log it along with the higher quality wood that grows with it in the mixed stands.

“We are trying to find a way to enable our communities to make a living from the wood we have,” Derrick said.

Recently Coast Tsimshian Resources, which is the largest licensee in the region, joined the coalition, putting its share of 565,000 cubic metres a year into the pot.

“I haven’t seen anything like this anywhere in British Columbia,” Coast Tsimshian president Wayne Drury said. “We are trying to create something instead of competing.”

There are no big offices so fixed costs are low and in this way the coalition is able to save on costs. The first step by the coalition was to launch their own website and to market themselves as a single entity. This makes it easier for a potential manufacturer to engage the fibre suppliers.

Sam Harling the Terrace economic development officer said in an interview that the independent loggers are learning to work together and already biofuel companies have expressed an interest in the coalition.

“The coalition is really finding itself as it goes along. But it is very promising because it’s a transition in thinking and approach to economic development in the forest industry. They are used to decades of certain models and that’s all changing,” Harling said.

According to Harling the coalition are focusing their energy on extracting all the value from a tree, beginning at the stump rather than only looking at the value of sawlogs.

The man behind the coalition is the Forests Minister Pat Bell, who realised that small tenure holders simply did not have the resources to attract an end user for their wood.

“There are no tenure holders that are large enough to support the variety of end-users that are needed for that fibre supply,” he said. “Also, you have such a variety of species … that even if you had 400,000 cubic metres of tenure, first you knock off half of it because it’s pulpwood, then you start dividing up the rest into the other species and you very quickly discover that you don’t have enough of any specific species to maintain a manufacturing facility.”

The coalition has since developed a breakdown of how much of each specific species is available, which gives any potential manufacturer a clear grasp of the volume of timber available.

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This entry was posted on Tuesday, March 30th, 2010 at 11:09 AM and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.