Declining Timber Industry IV/False Solution

Remember when it was environmentalists who got blamed for lost jobs
in the logging industry?
Lance

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“It is projected that close to a million repossessed houses will be
on the market this year. For each house that is repossessed there is
one that won’t be built, and consequently, lumber that won’t be
needed.

“According to Dingwall, Jamestown Lumber is not the only mill to
suffer from the troubled market. Of the seven integrated sawmills in
the province only two remain open.”
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http://www.thepacket.ca/index.cfm?sid=119727&sc=368
  Last updated at 4:08 PM on 24/03/08

Mill shuts down
Global economic events force local business to close

GAVIN SIMMS
The Packet

It’s not the Christmas present Bob Dingwall wanted to give his employees.

His business was expected to resume operations following the usual
holiday break. Instead, workers were told there was no more work at
Jamestown Lumber.

The mill, which used to operate all year-round, is facing a major
quandary. The decision not to reopen the plant was based on a number
of reasons, but three in particular.

“The opportunity to ship lumber to the states has come to an end due
to the equal value of the Canadian dollar, so there’s an immeasurable
amount of lumber trying to find a home in a relatively small domestic
Canadian market,” explains Dingwall.

The mill produced an average of 12 to 13 million board feet of lumber
each year. Dingwall notes that, until now, the company exported
roughly 70 percent of its product to the U.S. Over the past year or
so the company has lost 20 to 25 cents for every dollar that they
spent.

“We fought and lost money for five quarters. You only have so much
money to lose.”

As well, North American lumber markets are flooded with an
over-supply of product as a result of the Mountain Pine Beatle
epidemic in Western Canada.

The epidemic, which threatens to destroy vast amounts of forest in
BC, forced lumber mills in those parts to “put a ton of lumber on the
market at absolutely the worst time,” explains Dingwall. For this
reason, market value for lumber has decreased over the past few years
and continues to slip.

Thirdly, the subprime mortgage crisis in the United States has slowed
the demand for new homes. Houses in the U.S are being repossessed
because homeowners cannot make their mortgage payments.

It is projected that close to a million repossessed houses will be on
the market this year. For each house that is repossessed there is one
that won’t be built, and consequently, lumber that won’t be needed.

According to Dingwall, Jamestown Lumber is not the only mill to
suffer from the troubled market. Of the seven integrated sawmills in
the province only two remain open.

Government asked to help

While the uncertainty clouding the future of the lumber industry may
stretch far and beyond the provincial horizon, Dingwall is unwilling
to call it quits for good.

“We are keeping track of commodity lumber and pulp prices;
unfortunately, right now there’s nothing that would encourage
reopening. We made proposals to the government back in November and
January. They keep saying ‘wait until the budget’ but, in reality,
they don’t even remember meeting us. We’re not going to see any
government interest in forestry,” he predicts

All seven mills met with government representatives this past fall,
seeking the creation of a marketing organization that could identify
new products for the market, as well as new markets for existing
products.

Dingwall says they met with Trevor Taylor, Minister of Innovation,
Trade and Rural Development Department, as well as Kathy Dunderdale
and officials in the Department of Natural Resources.

The way Dingwall sees it, government clearly doesn’t care to breathe
life back into forestry. He contends that given the island’s bright
prospects with offshore oil “the government seems quite prepared to
let logging and sawmilling go by the wayside.

“We started in 1974 and we never received any sort of grant from the
government of Newfoundland and Labrador,” he continues. “They never
really knew we existed (in terms of financial assistance) but the one
time in the fall we asked them for help… They sort of said, ‘screw
you’.”

Dingwall seems convinced that small outports in Newfoundland, such as
Jamestown, are not on the chopping block per se but are already more
of a burning ember.

“People say the economy is booming but it all depends on which sector
you’re in and where you live in the province.

“People are all encouraged by oil refining and mineral development.
It’s not something that the government created but something that
they’ve responded to. The government’s riding a wave that they didn’t
build.

“The cost of servicing rural communities is pretty high so they think
it’d be better for them to let these communities go. It’s gotten to
be acceptable to say that the outports will all fade away.”

Moving on

As for the 41 former employees of the mill, Dingwall says “Some have
moved away; some to other provinces and others to different areas in
Newfoundland.”

Many of them are skilled workers and will not be easy to come by if
and when things turn around for the mill.

Dingwall says they get calls from people all the time, hoping they’re
about to reopen.

“Nothing’s changed in the situation, so we just tell them that we’re
still shut.

“Sawfilers, millwrights and lumber graders, for instance, were all
permanent positions. They’re all gone now because no one can sit on
their hands for too long. These skilled workers are never going to be
stuck for a job; there are some who were on a plane the next morning.

“Everybody wanted to come back to work, and no one wanted to go
elsewhere. We’re going to have real trouble trying to replace them.
You can’t exactly pull them off the shelves when you need them.”

Wood energy option

With lumber and pulp fiber weighing like a splinter in one hand, and
time on the other hand, the Jamestown Lumber Mill is looking to carry
yet another metaphorical “egg basket.” Dingwall hopes for a future
with wood energy.

“Neither pulp nor lumber in 2008 can stand alone, they can’t pay the
bills. Wood energy can.”

The idea of sustaining production based on wood energy is a proposal
that government has been handed, a proposal that Dingwall visions
“creeping” through the system.

Dingwall believes that there’s a “tremendous opportunity” for wood as
a cheaper source of energy. He is confident that public institutions
like hospitals, schools and other larger facilities would use wood
energy, rather than a more expensive fuel, if it was available
through a local wood pellet plant.

Dingwall says this project would allow them to keep the same number
of employees in the first year of production, and grow from there. It
would also keep the forest industry active and ready for future
developments.

“Committing to wood energy would maintain the logging sector and the
existing infrastructure so that when the lumber market returns we’ve
got a saw mill industry that can supply it… Newfoundland could
remain independent in its production of lumber.”

In the meantime, while Jamestown Lumber may be idle now, Dingwall is
confident it “will live to fight another day.”

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