March 2002 - Logging and Sawmilling Journal -

Hat trick for Canfor,

CANADA’S TOP

lumber producer

In hockey terms, BC-based Canfor Corporation has earned a natural hat trick, taking the position of Canada's largest lumber producer for the third year in a row. Like last year's Top 30 list, there were no significant shifts in position, as 2001 was not a year for acquisitions in the Canadian forest industry. Rather, it was a year of survival in the face of the uncertainty surrounding US-Canada negotiations on softwood lumber and potential duties.

The annual ranking of Canada's Top 30 Softwood Lumber Producers is published jointly by Logging & Sawmilling Journal and WOOD Markets Monthly newsletter. The annual survey, carried out by Vancouver forest industry consultants and analysts RE Taylor & Associates Ltd (publishers of WOOD Markets), indicates that in comparison to 2000 there was no change in rankings of the top seven companies, very little change in the rest of the top 30 and, again, very little change in the total output of companies.

With consolidation, the top 30 included two new companies-Dunkley Lumber and S&R Sawmills, both based in BC. The biggest news came in overall production. Due to restricted access to the US market and weaker prices, lumber output in Canada declined by one billion board feet in 2001. As a result, only eight Canadian companies attained the one-billion-board feet production mark in 2001, down from nine in 2000.

With pending duties and uncertainty about US-bound shipments, there was no appetite for major corporate acquisitions and just a handful of smaller ones (Interfor/Primex; Tembec/Davidson; West Fraser/Ainsworth's Chasm mill). Canfor's SPF lumber production totalled 2.26 billion board feet at its 11 BC and two Alberta mills. Despite US duties and mill curtailments, this represents a small but significant gain of 11 million board feet over 2000. In numbertwo position-slipping somewhat in 2001-was Weyerhaeuser Canada, with 2.05 billion board feet.

Weyerhaeuser's 12 SPF mills (including three in Ontario) alone totalled almost 1.4 billion board feet. The balance of Weyerhaeuser's Canadian lumber production is in its six coastal BC operations. Abitibi- Consolidated, with mills stretching from BC to Quebec, came in at number three with 2.0 billion board feet. West Fraser Timber was in the number four spot again with 1.71 billion board feet from its 14 Canadian mills (including its share of production from its three joint-ownership mills), an increase of 25 million board feet. The Slocan Group maintained its hold on fifth spot with 1.38 billion board feet-the same as in 2000.

Slocan and West Fraser remain the two lowest cost SPF producers in Canada. Four strong eastern Canadian companies continue to hold the next positions. Tembec's 1.23 billion board feet of production from its 14 mills (including two in BC) held the company's number six ranking. Privately held Buchanan Lumber was ranked at number seven with an estimated 1.1 billion board feet from its seven Ontario mills.

Domtar slipped to tenth spot with 900 million board feet, followed by JD Irving with 721 million board feet from its 10 mills in Atlantic Canada. Weldwood (a division of International Paper) came in at number eight, with 1.05 billion board feet at its seven mills (including its three joint-venture mills) and Tolko Industries was ninth with 903 million board feet from operations in BC, Alberta and Manitoba. The top 30 lumber producers accounted for 22.1 billion board feet, 79 per cent of Canada's total production of approximately 28.0 billion board feet in 2001.

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