New capital investment announcements yesterday by Tolko Industries (Southeastern Timber Products) and Western Forest Products (BC operations). In related news: Hammond Lumber acquires Brock’s Building Materials; the Paper Excellence deal lifts Resolute’s stock; and Tafisa Canada inaugurates its new Quebec plant.
In other news: New Brunswick hikes timber fees by 30%; Russ Taylor says lumber prices are likely to fall in Q3; and US construction levels off as higher rates reduce mortgage demand. Meanwhile: the EU sounds alarm on droughts and wild fires; FSC seeks entries for Leadership Awards; bylaw updates for BC’s forest professionals; the Pacific Lumber Inspection Bureau adds a technical director; and the times they are a-changin’ at the Federation of BC Woodlot Associations.
Finally, testosterone from pine pollen spurs new health products in New Zealand.
Kelly McCloskey, Tree Frog Editor
Surging construction costs, supply chain snarls and unprecedented demand led to something of a wild ride for lumber prices at the height of the COVID-19 pandemic. …According to Vancouver-based consultant Russ Taylor prices are around 50% above what would traditionally be considered a good market, although inflation, rising interest rates and cooler demand in the DIY market mean they’re likely to decline imminently. …Some of the challenges associated with the pandemic appear to be easing, with more mills now able to operate, produce lumber and bring supply into the market. …While the supply problem in the market is easing, inventory is still “quite low,” meaning that those who need to buy at present are propping up lumber prices to some degree. However, that situation will probably end before the season is out, according to Taylor, as some construction pauses due to summer breaks or hot weather.
Shares of Resolute Forest Products Inc. rocketed 65.3% to pace all premarket gainers, and to put them on track for an eight-year high, after the Montreal-based forest products company agreed to be acquired in a deal with an enterprise value of $2.7 billion by the Paper Excellence Group, through its subsidiary Domtar Corp. Under terms of the deal, each Resolute Forest share outstanding will be converted into a right to receive $20.50 per share, which represents a 64.1% premium to Tuesday’s closing price of $12.49, as well as a Contingent Value Right (CVR) that entitles the holder a share of softwood lumber duty deposit refunds. …”This agreement offers our stockholders the opportunity to realize a significant premium for their shares in cash, plus additional value with contingent value rights tied to the prospective recovery of accumulated deposits on estimated softwood lumber duties through the second quarters,” said Resolute Forest Chief Executive Remi Lalonde.
Last week, the federal government announced new rules which will govern the upcoming 3800 MHz spectrum auction, a move that will increase both the speed and availability of mobile and internet service across Canada. Forest Products Association of Canada (FPAC) applauds this decision which will provide remote and northern communities with essential wireless services. In response to the announcement, FPAC President and CEO Derek Nighbor issued the following statement: “The COVID-19 pandemic has dramatically shifted the way in which many of us work and live. It has also reminded us of the need for reliable digital networks to keep us connected to our family, friends, and jobs. In 2022, reliable wireless service is essential to life. For forestry communities, it is essential to their economic future and the safety of residents and critical infrastructure. …The future of our northern and rural communities and their ability to attract people, investment, and grow depends on it.”
VERNON, B.C. — The Board of Directors of Southeastern Timber Products LLC, an STP-Tolko Partnership (STP) are pleased to announce a $150 million USD capital investment in the STP lumber mill in Ackerman, Mississippi. The partnership is a joint venture between Tolko Industries (U.S.) Ltd. and STP Holdings, LLC. This investment is the next step in an expansion project that will upgrade the mill from 120MMFBM to 250MMFBM annual capacity. … “This investment is tremendous news for Choctaw County and Mississippi,” says Governor Tate Reeves. “It further expands the economic strength of this community and solidifies our state as a timber source for the world.” …“We’re excited to be moving to the next stage of this expansion,” says Tolko CEO Brad Thorlakson. “We first announced our partnership with STP in November 2018 and are happy to reinvest in the community as well as help strengthen and expand the local job market.”
Western Forest Products announced capital investments totaling $29 million towards its B.C. operations. The investments are part of the Company’s commitment to support value-added manufacturing on the Coast and grow its value-added wood products business, all while continuing to improve Western’s long-term competitiveness.
The fee forestry companies pay the New Brunswick government to harvest timber on Crown lands is set to go up by 30 per cent. It’s part of promised changes the province is making to its Crown timber royalty fee system, which are expected to result in an additional $50 million this fiscal year, said Minister Mike Holland. …”it will be part of a larger strategy to move towards legislation that creates fair market value and an upward adjustment based on commodity rates going forward.” The legislation is set to be passed this fall and implemented next April. …The legislation will also give the province the power to include additional “upward adjustments” based on commodity prices for lumber. …The New Brunswick Federation of Woodlot Owners said they’re happy it’s finally come. …The New Brunswick Lumber Producers said they are disappointed by the lack of transparency and details.
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With responsible forestry, natural climate solutions, regenerative building practices and consumer demand for environmentally responsible products at the forefront, FSC is inviting companies to showcase their leadership and inspire others to raise the bar. This year, the 12th annual FSC Leadership Awards recognize excellence in the use of FSC-certified products and commitment to responsible forest management in building, manufacturing, advocacy, conservation and individual leadership in the FSC community. People, projects and organizations in Canada, Mexico and the USA are eligible in a range of categories. …Past winners include Mattel, which sourced 97 percent recycled or FSC-certified content used in its packaging and products last year; and Canadian lumber and forest products giant GreenFirst, for maintaining FSC certification on over 9 million acres of complex boreal landscapes in Ontario and Quebec. Submissions are due September 16, 2022. Winners will be notified in October.
After a 2-year hiatus, the Fraser Valley Woodlot Association is proud to host the Federation of BC Woodlot Associations-Woodlot Product Development Council Annual General Meeting and Conference! The event will be held at the Clarion Hotel and Conference Centre in Abbotsford, BC from October 14 – 16, 2022. The Fraser Valley is home to world-class hiking, fishing, food, breweries, wineries and more. The theme of the conference is Woodlots: Rooted in Learning, with panel presentations on First Nations engagement and Forestry Learning and Education along with field trips to the BCIT Woodlot and a guided tour through the rich Aboriginal history of the eastern Fraser Valley. Early bird registrants will be entered into a Sturgeon Fishing draw presented by Sturgeon Bay Resources in partnership with Double Header Sport Fishing.
In 1964, Bob Dylan released a song called The Times They Are A-Changin’. It’s now 2022, and as it relates to woodlots (WL), truer words were never spoken …er sung. These days, nary a meeting goes by without a discussion about the new vision for BC’s forest sector and modernizing BC forest policy. Buzz words like ‘transformational change’ and ‘paradigm shift’ abound. In the spring 2022 Almanac, I highlighted a few of the government initiatives that are underway, notably old growth deferrals, Forest Act changes, and FRPA changes. But there are many others including the redistribution of tenures (which includes identifying crown land in WLs as special purpose areas), cumulative effects assessments, wildlife strategy, species-at-risk, and the Ministry of Environment’s watershed security strategy. Individually and collectively, these initiatives are going to materially change Woodlot Licences and the way they must be managed. …The good news is that WLs are held in high regard by the provincial government.
The bylaws governing the Association of BC Forest Professionals (ABCFP) have been amended to reflect operational business needs and changes in authorities, terminology, and other provisions in the Professional Governance Act (PGA) contained in 
JACKSON, Calif. — Evacuation orders were expanded Tuesday for remote California communities near a wildfire that may have been sparked by fireworks or a barbecue on the Fourth of July in a mountainous region that’s a top tourism destination. The Electra Fire in Sierra Nevada Gold Country broke out Monday afternoon and tripled in size to about 6.1 square miles (15.8 square kilometers). It was 5 percent contained Tuesday night. …Mandatory evacuation orders and warnings combined affected up to 700 residents in Amador County and 300 to 400 people in Calaveras County, Redman said. Evacuation centers were set up for people and animals. The fire started at a recreation area that was packed with people, forcing 85 to 100 celebrating the holiday at a river to take shelter at a Pacific Gas & Electric Co. facility, Redman said. All were later safely evacuated.