It’s year two of a slow, upward grind for Vancouver Island’s forest industry, and stakeholders are reporting signs of a slow turnaround.
An upward trend continues, albeit slowly, and a growing market in China is partly responsible.
“The trend is in the right direction, but it’s choppy, it’s volatile and it’s slow,” said Rick Jeffery, president of the Coast Forest Products Association. “A slow climb off the bottom.”
The coastal forest industry hit rock bottom in 2009 and Jeffery said this year is a little better than 2010, with steady demand for logs and lumber from China but significant challenges in U.S. markets – a recovery in those markets is expected to be at least several years away.
“China is a good news story,” he said. “But China is a difficult place to make money because they don’t want to pay high prices for product.”
Ian Marr, vice-president of the Nanaimo Port Authority, said revenues are up 18 per cent and some of this increase is thanks to logs and lumber going to Asian markets.
Fifty million board feet of lumber was shipped out of the port so far this year, compared with no lumber shipped at all last year.
“Logs are probably up 30 per cent in quantity over last year,” said Marr. “I think for the industry it is a bit of a comeback. It’s been so quiet for so long.”
Brett Hartley, president of the Island branch of the International Longshore and Warehouse Workers Union, said work has been so steady that most workers on the union’s casual list are working almost full time.
“We hired quite a few in August last year and some more this year,” he said.
Brian Butler, first vice-president of United Steelworkers local 1-1937, said more people are working on the logging side, but the sawmill jobs have been slow to recover.
“It’s definitely improved over last, but we still have our challenges in getting some of our manufacturing operations up and running,” he said.
Western Forest Products’s downtown Nanaimo mill re-opened on one shift last September and only the planer is running at the company’s Duke Point mill.
Butler said the union is calling for more investment by companies on the manufacturing side of the business and less raw log exports.
“For every logging job, there’s five milling jobs that are lost when that log is exported,” he said.
But Western spokesman Gary Ley said lumber markets remain uncertain, with the Japanese market slowing a bit and a slumped U.S. market.
At the same time, things are not nearly as bleak for the company as they were two years ago. Since last year, the company began reporting positive gains instead of losses in each quarter.
Levi Sampson, president of Nanaimo Forest Products, which owns Harmac pulp mill, said 50 per cent of the company’s products are heading to China.
Pulp prices are a little higher and while a strong Canadian dollar has somewhat neutralized these higher prices, most buyers and sellers believe the next three years will be good for pulp producers, he said.
Sawmill operations at Western Forest Product’s Duke Point location might resume in the near future.
Brian Butler, first vice-president of United Steelworkers local 1-1937, said Western has told the union it wants to reopen the sawmill on one shift in the near future.
Only the planer is currently running at Duke Point, which employs about 25 people working two weeks out of each month.
The sawmill portion of operations has been shut down since October 2009, said Butler, and the union is worried that the company is only resuming to avoid severance pay, which is due to workers after a two-year shutdown.
Western spokesman Gary Ley confirmed that the company had a conversation with the union about possibly reopening the Duke Point mill, but couldn’t say any more.
“It all depends on markets and opportunities,” he said. “Our intent is to run all our mills at maximum production.”