With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/296829
22 BCBusiness MAY 2014 But over the last six or seven years we've invested actively in B.C. to rebuild and upgrade our operations in the province as well as growing in the U.S. So we've been actively doing both and they're both generating attractive returns for us. What was the thinking behind the decision to expand in the U.S.? The U.S. is the biggest lumber market in the world, by a long shot. As part of our investment strategy, we wanted to produce product for the U.S. market from the continental U.S. So we saw opportunities both in the Pacific Northwest and the U.S. southeast to be able to establish ourselves in those areas, which we've done. What are the opportunities for growth in B.C.? Are they equally attractive as in the U.S.? We look at both as areas of opportu- nity. I don't think you'll see much in the way of expansion of the industry in B.C., just because of some of the constraints resulting from the impact of the mountain pine beetle infesta- tion. But we've bought businesses in B.C. over the last number of years, including one last year and we con- tinue to look for other opportunities to grow our platform in the province. At the same time a big focus of our attention in the last 10 years or so has been in the U.S., initially in the Pacific Northwest and more recently the southeast. How significant is the impact of the beetle infestation on the B.C. lumber industry in the long run? It's a natural disaster of massive proportions and it's going to have a major impact on production, particu- larly from the B.C. Interior, for a long period of time. There has been a sig- nificant number of mill closures over the last couple of years and there are a few more that have been announced that are coming this spring. What's important though, in context, is that the B.C. Interior is one of the largest lumber-producing regions in North America and it's a major source of sup- ply worldwide. As supply is impacted in that region it will have material impacts globally and will create other opportunities for investment as the remaining capacity is retooled to match the timber resource that will be available in the years to come. Everyone has been targeting Asia, China in particular, in recent years. How much potential is there? China is growing in leaps and bounds, and Japan has always been an impor- tant market, particularly for coastal B.C. producers, but increasingly for Interior B.C producers. We've got offices in all of those countries and it's part of our strategy to maintain a diversified market approach to our business. So we see China as being very important and the growth in China has been incredibly important over the last five or six years. We see it continuing to be a piece of the puzzle for us going forward. Forestry has historically been a cornerstone of the B.C. economy and its contribution has shrunk in recent years. Do you think it will ever come back to be the dominant industry it once was? Probably not, but the industry is still a significant player in the B.C. economy and will always be a significant player. As our economy matures and other opportunities are developed, how- ever—both in other natural resources like LNG, or in service industries and technology industries—the percentage that forestry contributes to total GDP will likely decline. But I'm convinced that forestry is going to continue to be a player in B.C. and that's one of the reasons why we continue to invest here. • SOURCE: BC Stats b.c. employment: a tale of two sectors Lumber/Manufacturing Restaurants/Bars 48,400 121,300 2003 2013 2003 2013 28,000 137,200 p18-24-Frontlines_may.indd 22 2014-04-09 3:12 PM