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Higher Output Through Increased Efficiency

Newsprint

From a record level, newsprint shipments fell in 1998 to 569,805 tonnes, representing a decline of 23.1% from the previous year. The decline was the direct result of a strike involving the mills at Grand Falls-Windsor and Stephenville that lasted just over five months. Many communities were adversely affected as the strike involved over 800 local mill workers, idled close to 500 company employees such as loggers, and as many as 700 independent loggers and forestry workers. Provincial GDP was as much as $100 million lower than it would have been in 1998 without a strike.

The value of newsprint shipments dropped by 11.4% in 1998. The decline in value was mitigated by increased US dollar transaction prices that were on average 7.6% higher than in 1997. Prices were supported by the strength of the US economy and lengthy strikes by major producers (Fletcher Challenge and Abitibi-Consolidated). The value of product shipped by Canadian mills has also been enhanced in recent years by depreciation of the Canadian dollar. This effect was particularly salient in 1998 as global economic turmoil further strengthened the US currency against the Canadian dollar.

Newfoundland and Labrador's two newsprint manufacturers have made sizeable investments in their operations over the years. The resulting improvements in productivity, capacity and product quality have enhanced the Province's competitiveness in what is increasingly a global industry. Corner Brook Pulp and Paper and Abitibi-Consolidated proceeded with upgrade and modernization spending in 1998 and have outlined their intended programs for 1999. Expenditures for 1999 are provided in the accompanying table.

Sawmilling

Recent years have witnessed remarkable expansion in the Province's sawmilling industry which currently provides upwards of 800 jobs. Through consolidations and efficient resource use and practices, the industry has experienced significant growth in terms of marketable volume as well as value added. Lumber production for fiscal 1997-98 is estimated at 90 million board feet and is expected to top 100 million board feet for fiscal 1998-99.

Resource Management

Efficient resource management has become a priority for the Province's forest products industry and is being deployed to address a deficiency in the supply of available wood fibre. Fibre exchange agreements between sawmills and paper mills, such as the exchange of saw logs for pulp chips ensure that the entire log is utilized and that quality timber is allocated to its highest valued use. Paper mills have also addressed the situation by incorporating the use of recycled material into their capacity expansion plans, importing fibre from the Maritimes, Quebec and Labrador and examining alternative harvesting methods. In recent years, silviculture activities have become a prominent feature in the management of Crown and private forest lands and have evolved to a point where they provide significant employment benefits for many rural areas of the Province.