North American Forest Company News

North American Forest Company News

This was Forestry Week in Vancouver, BC, with the Pulp and Paper Products Council and PwC holding their annual forestry conferences. Madison’s will provide coverage and updates on the sessions and conference topics in a future issue.
Meanwhile there was plenty of breaking news about North American softwood lumber production; including downtime, curtailments, earnings reports, and some accidents at sawmills.
Weyerhaeuser reported May 1 a bigger-than-expected drop in earnings, despite a strong start to 2015 for many lumber markets, as the timber giant grappled with mill hiccoughs and port hold-ups.
The US-based group – which controls nearly 7 million acres of timberland – reported a halving to US$90 million in earnings for the January-to-March quarter. Underlying earnings per share came in at $0.19.
The group blamed the weaker result, including revenues down 0.8 per cent to US$1.72 billion, on factors including the strong dollar, the labour dispute which hampered exports from US west coast ports for much of the period, and a slower-than-expected restart of its largest fluff mill after a scheduled maintenance outage.

Updates and Announcements

Sales in the company’s wood-products business fell 2.5 per cent to US$923 million as lower sales across all product lines overshadowed cost improvements and higher production volumes for engineered products.
And while the company’s 2Q outlook lists lower earnings expectations from its timberlands and cellulose fibre segments, Weyerhaeuser projects a significant bump in its wood products earnings.
Weyerhaeuser expects significantly higher earnings from the wood products segment in 2Q. The company anticipates seasonally higher sales volumes across all product lines and average sales realizations for lumber and oriented strand board comparable to the first quarter. The company also expects lower Western log costs and lower per-unit manufacturing costs.
Quebec-based forestry company Tembec said Monday it has just endured a tough winter quarter that resulted in a $40-million loss. The loss amounted to 40 cents per share, which was deeper than the year-earlier loss of 28 cents per share or $28 million.
Among other things, Tembec said winter weather had a bigger impact than anticipated on energy costs and efficiency. It also said the weakening of the Canadian dollar produced a $37-million loss related to debt issued in US dollars.
Overall sales were down nearly four per cent, dropping to $348 million in the second quarter ended March 28 from $362 million a year earlier.
Elsewhere, as a result of log supply constraints and low lumber prices, Tolko Industries will take downtime at it’s Quest Wood sawmill in BC, effective May 4, 2015, the company said Wednesday. The company expects the curtailment will be one week in duration but it may be extended based on log inventories and lumber prices.
“At current pricing levels we are evaluating the operating stance at all of our mills,” said Troy Connolly, General Manager BC Lumber.
As well, all six of Hampton Affiliates’ western US sawmill operations will be impacted by a “rolling curtailment” plan, starting with three facilities during the week of May 4 and shifting to the next three during the week of May 11, the company said Thursday. That schedule will be reviewed, then adjusted or continued according to changes in current market conditions. Over 30 million board feet of stud and dimension production will be impacted by the curtailment.
Shipping departments will remain open at all Hampton mills during the curtailment period and be subject to closure during any future shutdown extension.
In Virginia, the Louisa County Sheriff’s Office and the Occupational Safety and Health Administration were Thursday investigating the death of a worker Tuesday at the Chips Inc sawmill by Zion Crossroads near Richmond, VA. Logs, boards, and sawdust lay everywhere as 46-year-old Sean Marcus Lucas went to work filling his tractor trailer full of the tiny wood particles.
Detective Mark Stanton with the Louisa County Sheriff’s Office said to WTVR at some point that Lucas, who lived in Palmyra, stopped and got back into his truck thinking all of the sawdust had come down, but it had not.
Stanton said a large amount of sawdust suddenly started falling after Lucas got back into his truck. Lucas got out of the cab of his truck to try to escape, but the sawdust fell too fast. Stanton said the co-workers of Lucas pulled him from the dust and tried to revive their him, but it was too late.

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In other developments, according to the latest statistics from the State Forestry Administration, the value of China’s 2014 international trade in wood products rose 8.4 per cent to US$140 billion. While this was a record high the rate of growth in trade fell by around 1 per cent compared to 2013.
Wood pulp, logs, sawnwood, waste paper, paper, paperboard and paper products and wood chips imports dominated the trade accounting for 95 per cent of the value of wood product imports in 2014.
And finally, in March 2015 Brazilian exports of wood-based products (except pulp and paper) increased 23 per cent in value compared to March 2014, from US$218.6 million to US$282.3 million.
Brazil’s pine sawnwood exports increased 31 per cent in value in March 2015 compared to March 2014, from US$17.5 million to US$25.4 million. In terms of volume, exports increased 30 per cent, from 75,500 cubic metres to 108,300 cubic metres over the same period.
Pine plywood exports jumped 26.5 per cent in value in March 2015 in comparison with March 2014 from US$37.0 million to US$ 46.8 million. The volume increased 28.9 per cent, from 98,800 cubic metres to 127,400 cubic metres.
Reflecting the growing interest in international markets, it is no surprise that Brazil’s tropical plywood exports increased almost 138 per cent in volume, from 4,000 cubic metres in March 2014 to 9,500 cubic metres in March 2015 and the value increased from US$2.3 million in March 2014 to US$4.7 million in March this year.
Exports of wooden furniture have started to recover with March exports totaling US$46 million, up from US$41 million in March 2014.

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