Click chart for enlargement

 

Photo: Department of Forest 
Resources and Agrifoods. 
Growing seedlings for silviculture 
program.

 

 

Volume of newsprint shipments expected to approach 1997 level. Newsprint prices expected to increase driven by high economic growth in the U.S., Asia and Europe.  Lumber production to increase to a record 115 million board feet, driven by export demand.

 

 

Photo: Department of Forest 
Resources and Agrifoods. 
Locally produced wood products.

 FORESTRY

The newsprint, sawmill and wood products industries contributed to the Province’s strong economic growth in 1999 and by all indications, performance in these sectors should be even better in 2000.

Newsprint
Newsprint shipments totalled 722,000 tonnes in 1999, an increase of 27% from 1998. Shipments in the past two years were lower than the record level of 740,900 tonnes set in 1997 due to the five month strike at Abitibi-Consolidated in 1998, and the one month strike at Corner Brook Pulp and Paper in 1999. The capacity of the Province’s pulp and paper mills is about 784,000 tonnes annually, split evenly between the two companies. Major collective agreements have been renewed at both companies, enabling stable production over the next several years.

The estimated value of newsprint shipments in 1999 was $550 million, an increase of 9% from 1998. Lower newsprint prices prevented value from rising as much as volume. Newsprint prices in 1999 were at their lowest since 1994, due to excess supply in the world market. Prices averaged US$509 per tonne, a decrease of almost 15% from 1998. Prices dipped to a low of US$470 per tonne in September 1999 but increased to US$515 per tonne by the end of the year. Stronger global economic growth has prompted newsprint producers to announce plans for a further US$50 per tonne increase in April 2000.

Both newsprint companies made significant capital investments in 1999 to improve their infrastructure, operations and productivity in the Province. Corner Brook Pulp and Paper invested $28 million in its mill and Abitibi-Consolidated invested $24.5 million at its two mills. Both companies will also engage in significant capital investment programs in 2000. The recently announced merger between Abitibi-Consolidated and Donahue will likely lead to additional efficiencies over time.

Government, in conjunction with the Province’s newsprint manufacturers, is examining the feasibility of establishing a de-inking facility in the Province. This facility, which would require a capital investment of at least $60 million, would transform waste paper into a pulp product. The product could then be utilized in the paper making process. This technology is in use throughout the world, including 23 facilities in Canada, serving to reduce the pressure on forest resources.

Lumber Production
The volume of lumber production in 1998/1999 hit an all-time high of about 110 million board feet, an increase of 11% from the previous year. Almost 50% of this lumber is shipped outside the Province demonstrating industry competitiveness and generating new economic activity. Production has doubled over the past six years, driven by export markets, firm consolidation, efficient resource use and practices, and increased opportunities for value-added products. Over 3,000 people are employed on a full-time or part-time basis in the lumber industry.

Value Added Production
Secondary processing of wood products has increased over the past several years. Today, there are 15 wood product manufacturers in the Province that utilize locally produced lumber, as compared to three manufacturers a decade ago. Wood products from 11 of these manufacturers were exhibited at trade shows in 1999, featuring flooring, kitchen cabinets, furniture, moulding, paneling and garden products.

Forest Resource Management
Maintaining and enhancing wood supply is important to the sustainability and growth of the forest industry. Government is pursuing policies targeted at fuller utilization of forest resources: encouraging fibre exchange agreements between newsprint mills and sawmills; silviculture initiatives including planting, pre-commercial thinning and land reclamation; and using waste products to generate electricity. Also, newsprint producers are importing recycled paper and wood chips from outside sources. Abitibi-Consolidated recently became the Province’s first woodland division to be ISO certified. This independent certification means the Company is adhering to internationally-recognized quality and environmental standards for harvesting forestry resources.