SOURCE: GLOBE AND MAIL / BY PETER KENNEDY / FRIDAY, APRIL 15, 2005 PAGE B10
VANCOUVER -- The trend towards bigger, more efficient sawmills is helping to boost lumber recoveries and make the Canadian forest sector more profitable, according to a PricewaterhouseCoopers survey. The survey released yesterday said profits reported by the top 10 forest companies in Canada soared to $930-million in 2004, compared with $242-million a year earlier.
The biggest winners were the solid-wood producers such as Canfor Corp. and West Fraser Timber Co., the survey said.
This was due in part to high lumber prices and investment in sawmilling technology that sent profits in the British Columbia lumber sector rising to a record $1.5-billion in 2004.
That was up from $340-million a year earlier, according to preliminary estimates by PwC. "We have seen a lot of capital invested on process controls, and lumber recovery to increase capacity and reduce costs,'' said Craig Campbell a partner with PricewaterhouseCoopers in Vancouver.
"Half a dozen significant capital projects, in excess of $50-million each, have been announced or are already under way at sawmills in the interior of B.C.,'' Mr. Campbell said.
This is part of a broader trend that has allowed the North American sawmilling sector to produce 40 per cent more lumber in the past 17 years, even though the number of mills is down 34 per cent. The B.C. industry, for example, has been able to increase the amount of lumber it can recover from the same amount of logs in the last decade by 1.4 billion board feet.
Mr. Campbell said record earnings in B.C. have helped to offset the impact on Canadian forest sector results of softwood duties, unfavourable exchange rates and an oversupply of newsprint.
Norbord Industries Inc. was the most profitable of the 10 companies included in the survey. The Toronto-based producer of oriented strandboard posted a profit of $424-million in 2004, up from $240-million.
CANADA'S TOP 10 FORESTRY FIRMS
2004 PROFIT (LOSS) IN $ MILLION
1 Abitibi Consolidated -$36
2 Domtar -42
3 Canfor 421
4 West Fraser Timber 212
5 Tembec -1
6 Cascades 23
7 Norboard 424
8 Norske -29
9 Fraser Papers -56
10 Pope & Talbot 14
TOTAL $930
