Trees cut for local mills, not export: Company

Robert Barron, The Daily News
Published: Tuesday, January 12, 2010

While acknowledging exports of raw logs to Asia are on the rise forest companies say that the bulk of the wood that is being harvested in southwestern Vancouver Island this winter is intended for local mills.

Spokespeople for TimberWest and Western Forest Products, which together own more than 350,000-hectares of land on the Island, said Monday that the rate of the ongoing harvesting on their lands is normal and mainly intended to replenish low wood and fibre inventories at Island mills, including Nanaimo's Coastland Wood Industries and the Harmac pulp mill. They said this year's annual winter harvest is concentrated in their lands in the more-populated southern sections of the Island, rather than remote northern areas, due to better accessibility caused by an unusually mild winter.

The companies maintain it is not connected to the expected end of the moratorium on the export of raw logs from former tree farm licence land at the end of January, as suggested by some environmental groups.

David Elstone, a market analyst with Vancouver-based Equity Research Associates, said there has been an increase in the export of raw logs to Asia with the collapse of lumber markets in the U.S., but the economics of the long-distance transport of the logs may not make it financially feasible for very long.

"Most of the operating mills on the Island have been reporting low inventories so the companies have a valid argument in saying they are working to fill them from their lands in the south because harvesting is easier there with no snow this year," Elstone said.

TimberWest spokeswoman Sue Handel said 75% of the approximately one-million meters of wood and fibre that the company will harvest this winter will go to Coastland, Harmac and mills belonging to Catalyst Paper and WFP in other parts of the south Island. She said the remainder will be exported as raw logs, with most heading to Asian markets.

Elstone said, with the price for B.C. wood currently low combined with a prohibitively high raw log export tax in Russia, their traditional fibre-source, Asian nations, are taking an increasing share of raw logs from B.C. and North America.

"However, we can expect prices to rise here and a more balanced export tax from Russia will likely come into play, and that will impact our raw log exports to Asia," he said.