By Charlene Tebbutt

Strong demand, higher prices generates optimism in forestry industry

Mar 29, 2018 | 12:14 PM

Strong demand for exports is leading to improved prices in the forestry sector, and there’s hope the industry will continue to rebound.

After several years of declining logging and wood processing in Saskatchewan, there is optimism once again in the forestry industry. Numbers released this week by the province showed the forestry industry generated product sales of nearly $1.2 billion in 2017, a 21 per cent increase over the previous year. Last year saw the highest value of forestry product sales in over a decade, the province noted, and the industry is emerging as one of the strongest for growth in Saskatchewan, with prices expected to remain high for several years.  

Those in the forestry industry agree there is renewed optimism in the sector. Trevor Reid, general manager of Edgewood Forest Products in Carrot River, said the company set a production record in 2017 and he expects to produce even more in 2018.

“It’s full steam ahead for us,” Reid told paNOW this week. “In 2017 we eclipsed just over 100 million board feet, and we’ll be pushing up on 120 million board feet in 2018, which is a 20 per cent year-over-year increase.”

Edgewood said he made a number of investments in new equipment and technology in anticipation of improved market prices. The company employs approximately 150 people, he noted, and contracts another 500. The company unveiled a new production line and upgraded operations at the mill in 2016, and Reid said Edgewood commissioned the work in anticipation of the more robust lumber markets.

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“Lumber prices have been historically at an all-time high in recent months,” Reid added.

Robert Fincati, CEO of Montreal Lake Business Ventures Limited Partnership, told paNOW the forestry sector has improved but there are still challenges. Trade disputes over softwood lumber are hampering the industry, he said, and the lack of a local processing facility to handle residual wood and small-diameter wood products is hindering growth, he said.

The reopening of the Prince Albert pulp mill would benefit the industry and create opportunities to process more wood products, Fincati added. A spokesperson for the company that owns the mill, Paper Excellence Canada, said in an email that there are no updates as to when the mill might reopen.

“I think one of the key things right now is just having some kind of a facility, hopefully the pulp mill in Prince Albert, to be able to take some of that residual product off the forest,” Fincati said. “That allows us in our harvesting to be able to go into some of the marginal stands, as well as some of the more mixed wood stands on the hardwood side.”

While prices are currently high, Reid said rail backlogs in the province and across the country are also having a negative effect on companies trying to get their product to markets. With record-high inventory levels and slower rail lines, he said Edgewood has been paying more to truck their wood products out.

charlene.tebbutt@jpbg.ca

On Twitter: @CharleneTebbutt