A coastal forest company that was shutting down mills and selling the parts to China two years ago announced on Tuesday a $200-million injection in capital for its Vancouver Island sawmills.
Lee Doney, vice-chair of Western Forest Products, credits the remarkable turnaround to lumber sales in Asia. Last year, the company shipped eight container vessels’ worth of wood overseas. This year, it expects to see off 21 shiploads of timber products.
Mr. Doney announced the company’s investment in Nanaimo, with stacks of milled lumber behind him and Premier Christy Clark at his side.
In 2009, forestry employment in B.C. bottomed out and the industry “was on its knees,” Mr. Doney recalled in an interview Tuesday.
Today, Western Forest Products has just marked its seventh consecutive profitable quarter, and Mr. Doney’s board has promised the cash to revitalize the company’s mills over the next three years.
The company has reopened four sawmills in the past 18 months, and its lumber production is up 20 per cent this year. Its payroll is up, too, by about 15 per cent, and the company is the largest private-sector employer on Vancouver Island.
The Premier, who will lead a trade mission to China next month, said the company’s confidence in the future shows British Columbia’s once-moribund forest industry is thriving again.
“It’s not a sunset industry in British Columbia any more, there’s a great sunrise,” she told the conference.
B.C. has increasingly shifted its attention for lumber exports from the United States – where new housing demand has shriveled – to fast-growing China. Even with signs that China’s growth is slowing, Ms. Clark has not dampened her enthusiasm for hitching B.C.’s recovery to its China export strategy.
“This is all of course thanks to China. The wood you see behind me, is going to be shipped to the fastest growing economy the world has ever seen,” Ms. Clark said. “We need to be there with our wood.”
Mr. Doney said the new investment will be spent modernizing mills and operations – but the details of just where the money will be spent are still to be decided. He said a recovery in the U.S. is still part of the company’s plan. “We do see a future,” he said. “It’s still struggling, the forest economy, but we think it will be better.”
In fact, the one thing he is asking Ms. Clark for is more certainty over wood supply.
“Our mills are based on our security of tenure holdings,” he noted. While the company has sold off some “non-core” lands, a large share of its timber supply – 35 per cent – has been whittled away by government decisions over land use and first nations settlements.
“We need every stick of wood in our wood basket for our nine mills,” he said.
The good-news announcement for forestry jobs could easily be eclipsed on Wednesday, when the federal government is expected to announce the winners and losers in the bidding war for $35-billion worth of shipbuilding contracts.
Seaspan Marine Corp. is bidding against shipyards in Nova Scotia and Quebec for two contracts – a $25-billion contract to build new fleet of warships, and an $8-billion deal for non-combat ships.
Jobs Minister Pat Bell said B.C. would be grateful for even the smaller contract. “Either one we’d be very happy with,” he told reporters Tuesday. “The benefits to British Columbia in terms of the noncombat contract are significant as well. A lot of the $25-billion in the combat portion of the contract relates to outfitting the ships, the guns and so forth. So that may or may not create as much incremental benefit.”