Terrace Standard – Business
February 01, 2011 11:00 PM

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It may not be like the old days when logging, trucking and then making either lumber or pulp and paper made up the regional forest industry, but the first two activities are putting people to work and providing a badly-needed economic lift. It all has to do with export, sending logs either down south or sent overseas, mainly to China.

Terrace-based Bear Creek Contracting harvests wood in the northwest and packages logs for water-borne shipping from Prince Rupert, and president Ian Munson says he’s noticed more activity in the industry.

“Forestry is coming on again, and as long as people here are prepared to support what’s going on, I think it’ll be good for all businesses in the area,” he said.

“I’m a full supporter of raw log exports, because the northwest would be dead without it,” Munson said.

When mills began to close, Bear Creek diversified into activities such as road building to keep its doors open, but Munson said now the company is starting to get busier in forestry as well.

“There’s a bunch of people out there…that blame raw log exports for a lot of woes, but in the northwest, it’s been the only thing that’s employed people for the last few years,” he said, adding that there is now a shortage of equipment and trucks in the area to get the product overseas.

Bill Sauer, manager of the North West Loggers Association, confirmed that local contractors are working, saying that there’s even trucks coming in from out of town to deal with the shortfall.

“There’s a shortage of equipment, a shortage of trucks, and a shortage of operators,” Sauer said, explaining that local contractors are looking for all three.

Sauer said the association’s position is that if there weren’t any log exports, there wouldn’t be a forest industry in the area at all, pointing out that there is no sawmill west of Smithers.

“It’s not the ideal situation. Everyone would like to see local manufacturers,” he said, but said wood should go to the highest bidder, and that’s not happening locally right now. This is the best the area can do right now, he said, pointing out that it does create employment.

“For now, we’re happy to see the amount of activity we are seeing in the forest harvesting sector, and we can only hope to get better,” Sauer said.

The forests ministry came out with a set of statistics in December 2010 indicating that across the province employment in the timber harvesting sector was up by 4,500 jobs from 2009, and jobs were also up in the wood product manufacturing sector.

And for the first time ever, the relative value of B.C. forest products shipped to China and Japan surpassed the value of that shipped to the U.S., the ministry notes.

The number of logs being exported overseas from the northwest has also grown over the years.

In 2006, the forests ministry recorded 320,000 cubic metres of whole log exports for the northwest, rising to 378,000 cubic metres in 2007. The number fell to 241,000 cubic metres in 2008, but rose again in 2009 to 369,000 cubic metres. Last year was the highest number yet – 534,000 cubic metres.

Coast Tsimshian Resources Limited Partnership is a northwest forest company owned by Lax Kw’alaams First Nation, and one of the companies contributing to this increase.

Its first year of export was in 2007, and it sent test shipments of 1,500 cubic metres to China. It doubled that number in 2008, sending 3,500 cubic metres of logs overseas.

Export numbers boomed in 2009, the same year the company opened an office in China. Coast Tsimshian sent out 152,500 cubic metres that year; Japan saw about 37 per cent of these logs, and China and Korea received 32 per cent and 31 per cent respectively. Logs were first brought to the company’s log yard in Terrace for processing before being taken to Prince Rupert.

“That’s why we opened our office in China, because we saw the opportunity to focus on the Chinese market to create employment opportunities that were not otherwise there in the northwest,” said Wayne Drury, CEO of Coast Tsimshian.

Lax Kw’alaams chief councillor and Coast Tsimshian board chair Garry Reece said the impact of a declining fishing industry spurred his council into looking other ways to encourage employment.

Drury said one of the focuses of Coast Tsimshian Resources is to create employment, and estimates that the number of people employed has probably doubled in the five years since operations began.

Its exports have also doubled, with 303,000 cubic metres of logs sent overseas in 2010; this time the majority of this volume, 55 per cent, went to China, while Korea and Japan got 24 per cent and 21 per cent of Coast Tsimshian’s exports respectively.

Before 2008, Drury said Coast Tsimshian sold logs to more than 70 clients in B.C., and it still does what it can to support operations in the northwest.

“But if we didn’t have the opportunity to export….those 200-odd people who are working as a direct result of our operations wouldn’t be there,” he said of the logging, trucking, debarking, tugging and shiploading jobs needed for the operation.

The goal, Drury added, is to use the export market and revenue as a springboard to re-establish a value-added woods industry in the northwest.

He also pointed out that Coast Tsimshian isn’t the only company exporting logs.

“Ourselves and a lot of other people are working really hard on a range of opportunity to create employment and economic benefit for the northwest,” he said.

Chinese-owned Canada Resurgence Development (CRD) has slowly but steadily been increasing the amount of wood it sends overseas. CRD holds a forest licence near Meziadin Lake and made the move to Terrace in 2007. It just started debarking logs in the old Kalum Wood Products mill site near Kitsumkalum and shipping them overseas last July.

CRD’s Owen Fewer said it exported approximately 22,320 cubic metres in 2010, all going to China.

Terrace-based northwest logging company Timber Baron Contracting Ltd. has a relatively long export track record. It started shipping logs to China seven years ago and was selling to Korea before that. When the local mills closed down, the company looked overseas.

“We were actually the first company in North America to legally bring a load of wood to China,” said Timber Baron president Lee Thomson, saying that the biggest challenge was solving how to get rid of the bugs in the wood before shipping them out.

Originally, the company submerged the wood for 90 days in water in the Stewart port, but now it is debarking the logs. It moved its log sort yard and container stuffing facility from Prince Rupert to the old Skeena Cellulose mill site in Terrace last July.

“The China market is very good for the northwest,” Thomson said.

Timber Baron employs 15 people directly, but around 55 people indirectly through truck drivers and loggers. About 90 per cent of Timber Baron’s logs go to China, and about five per cent go to Japan.

Despite higher overall export numbers, Timber Baron isn’t exporting more logs than before. “Our production has actually fallen,” Thomson said. “There’s more competition for us.

“The market’s changed, everyone’s on the same bandwagon now,” he said.

Thomson acknowledged that truck drivers and contractors have been very busy lately, but noted that there aren’t as many drivers in the area anymore. “Everybody either climbed out or sold out,” he said.

Still, Drury said the opportunity to export is a huge economic driver in the north.

“We’re (not) taking away jobs from somewhere, we’re actually creating something in the northwest,” he said.