10 reasons to feel good about our industrg

By Robert E. Manne President and c.e.o. Pnlco-The Pacific Lumber Co. Scotia. Ca.

n-tHIS industry is not for the "faint I of heart." lt would be easy to lose your optimism as a member of the forest products industry, particularly here in the state of Califomia. Especially if you read the press and think about what goes on around us every week, from mill closures to wildfires.

Despite all the negativity, I am very upbeat about the future of our industry. I definitely feel we have a lot to look forward to.

Here's why I feel so positive: l. Our markets and our local and national economy look strong once again. For the redwood producers, our niche markets remain strong. For our fir, pine, and hardwood producers, all construction projections appear confident that we will have another great year with strong housing starts. U.S. housing starts reached 1.85 million in 2003. December seasonally adjusted starts were 2. I million and will carry into 2004. The U.S. dollar has slowed imports. Prices are rising once again and are expected to be in the 5Va to 6Vo range for 2004. Remodeling in 2003 was $182 billion and forecast in 20O4to be $192 billion.

2. fn" business environment in California is changing. We have a new governor with new energy, new ideas, and a more positive and pragmatic view of the importance of forest products to our state. Governor Schwarzenegger's environmental plan states that our lands are an important part of our economy, providing jobs for timber, harvesting, ranching and recreation. To sustain these lands for future generations, he has directed the state agencies to improve the effectiveness and efficiency of the California Forests Practices Act and is suggesting that we protect forests with a combination of incentives and science-based management programs. He wants our industry, as well as others, to become competitive once again so that California can achieve its economic significance once again. He wants to create a business climate that encourages investments for business expansion.

3. California definitely has some economic and budgetary issues, but with the new hope of Sacramento, California will return to the economic power we once were. Considering that the majority of our forest products stay in California, I remain very optimistic that our markets will remain positive and get even better. We all need to remember, timber is still a significant crop in California, ranking among the state's top l0 most valuable commodities.

4. goth the governor and California EPA Secretary Tamminen fully embrace the ttCalifornia Growntt program. They are both concerned that we consume much more wood products than we produce and are asking state entities to give purchasing preference to wood produced in California' s well-managed forests.

5. fn" appointment of Jim Branham. Parcots former director of government & public affairs, to the Schwarzenegger Administration as the Under Secretary of CaIEPA is significant. Jim has an in-depth understanding of industry issues. This appointment, along with Mike Chrisman as Secretary of Resources, will be good for our industry and good for the future direction of the government.

6. Witttitt their first 45 days in office. Tamminen. Branham and state Water Board director Baggett each visited Mendocino Forest Products, Simpson Timber and Puco to understand our issues. That level of interest by these positions is unprecedented. During their visit to Pa,lco, Chrisman stated that we need a way to provide incentives and a break in the Timber Harvest Plan process to those companies with signed Habitat Conservation Plans and third-party certified sustainable operations.

7. Discussing SB810, Tamminen said he is a team player and wants to avoid any future agency turf battles. He is the best solution for the integration of Water Board staff with the offices of California Department of Forestry & Fire Protection. He feels they need to provide a more cooperative working environment and to offset any potential agency battles over who has the power to approve THPs. This is a more rational approach. We need to all push to see that it happens.

8. Do not forget the positives that will eventually come from President Bush's Healthy Forest Initiative.

9. fn" Administration realizes that Californians are suffering from an environmental paradox. We have a massive appetite for wood products (importing l5Vo of our needs), but import from other states and countries that do not adhere to our high environmental standards. They believe this is not a sustainable situation and threatens our own commercial forestlands. This new attitude will change the way the agencies feel about timber harvesting operations in the state.

L0. ,q,ttitoaes toward our industry and toward environmentalists are changing. For instance, author Michael Crichton recently stated, "The greatest challenge facing mankind is the challenge of distinguishing reality from fantasy, truth from propaganda especially, in this disinformation age."

He went on to say, "Today, one of the most powerful religions in the Western World is environmentalism... Environmentalism seems to be the religion ofchoice for urban atheists."

A Moore Research report found that 6l%o of voters nationwide agree that environmental groups are too extreme. And a majority (52Vo) of Americans today are comfortable using wood and paper products, a significant increase from only five years earlier.

The cumulative effects of our education, marketing and industry activism is changing the way the public views our industry. We need to stay the course and keep getting our message out. Wood is the Earth's onlY renewable resource, and we all need to remain committed to sustainability.