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FactsFax - Issue #459
Central Interior Logging Association - May 13, 2008
Pope & Talbot sale fails
Pope & Talbot is shutting down its pulp mill operations including its Mackenzie mill, after failing to reach a deal to sell three mills to the Indonesian-based Sinarmas Group. The sale process deadline for the Mackenzie, Nanaimo and Oregon pulp mills had been set for April 30, but the creditor financing had been extended until Monday. The deadline also included the sale of the sawmill in Fort St. James to the Sinarmas Group. The Fort St. James mill has been down since mid-October, which has put about 280 mill workers off the job plus affecting numerous logging and trucking contractors.
The closure of the Mackenzie pulp mill will put another 260 workers off the job. Mackenzie has already been hard hit by Abitibi Bowater's closure of a paper mill and two sawmills and by Canfor's idling of a sawmill.
Pope & Talbot spokesperson Mark Rossolo said the company is still negotiating with Sinarmas to see if the two sides can come to some sort of re-negotiation on the original pulp mill deal. He notes that the company has the ability to negotiate the sale of individual mills as opposed to the package deal.
Future will be brighter
Avrim Lazar, president of the Forest Products Association of Canada says that while the industry is "in a hole" right now, he sees demand soaring due to forecast population and GDP increases.
"The industry has fallen down a hole," Lazar recently told listeners at a forestry conference held by business consultants, Pricewaterhouse Cooper. "If you stay in the hole you can't see the horizon. We see a horizon that is quite golden."
Lazar said that while "you need a ladder" to see beyond the current industry slump - caused by the collapse of the US housing sector and soaring loonie - there will be a big turnaround down the road. Growing demand coupled with land scarcity to grow crops for food and bio-fuel will lead to future growth in the forest industry. He believes that while the costs of food, fibre and oil won't be the same, they "will be equally influenced" by soaring demand.
WorkSafeBC announces higher rebates for SAFE certified companies
As a result of efforts by the BC Forest Safety Council (BCFSC) along with other Certificate of Recognition (COR) certifying partners working with WSBC, the SAFER Companies COR rebate is increasing for 2008. The annual COR rebate on assessment premiums for all eligible SAFE certified companies is going up from five to ten percent.
The COR rebate is part of WSBC's Partners Program, which offers incentives for employers who practice good safety management. It is an industry-driven program that links employers with an industry Certifying Partner, such as the BC Forest Safety Council, to meet program standards and qualify for WSBC premium rebates. The rebate increase, which takes effect this year, is good news for employers and for the forest industry, which is facing challenging economic times. SAFE Company audit standards will remain the same and eligible SAFE certified companies will receive the higher rebate without having to do any extra work.
The total potential COR rebate is still up to 15 percent of premiums paid. The other five percent rebate will be accessible through achieving the injury management / return to work (IM / RTW) COR. Development of the IM / RTW audit process is underway and is expected to be available in 2009. For further information contact the BCFSC or WSBC.
CILA participates in roundtable
Co-chair ministers Rich Coleman and Pat Bell and members of the Working Roundtable on Forestry held meetings with industry, labour and First Nations representatives on May 3 in Prince George. Industry and labour provided input on changes needed to make the industry more competitive in the future. Following the main forum, Working Roundtable members engaged in further dialogue with First Nations representatives.
The CILA recommends that government initiate major tenure and stumpage reforms including that area based forest tenures be issued to third party land managers that would focus on maximizing growth on the forest land base and on selling timber on an open competitive market basis. This would provide available timber to all sizes of firms from small community-based producers to regionally-based and larger international firms. This would help new businesses to access timber on a competitive basis and assist many of the smaller communities struggling under the current tenure approach.
The CILA also recommends that a tripartite forest products marketing alliance, consisting of the BC and federal governments and BC industry, working collaboratively to develop a short and long-term strategic plan to diversify the BC forest products markets offshore in India, China and other areas of the world. This will help reduce the large reliance on a single market such as the US. The alliance would help address trade barriers to accessing new international markets as well as identifying action needed to address competition from new emerging competitors such as Russia. The CILA suggests that a Business Advisory Council be created to provide on-going input to government to help BC industry have a more competitive advantage.
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