Looking up to Ganadian lumber

Canadian forest products companies have been selling into the eastern U.S. for many years, so they have been able to work out most of the complexities now that they are increasing shipments into other parts of the country. Many of the complications were resolved with the innovations in phones, fax machines and computers.

And Canadian companies do have something valuable to offer, nanely supply. According to the Canadian Wood Council, nearly half of the nation's 2.5 billion acres is forested and half of that (600 million acres) is available for commercial forestry. This massive resource accounts for l1Vo of. the world's sofnvood timber, ftom which Canada produces llVo of the world's lumber. Over half of Canada's annual production (about 13 billion b.f. of lumber) is exported to the U.S., meeting over 25Vo of U.S. lumber needs.

Keith Alsop, assistant sales manager, Olympic Industries, North Vancouver, British Columbia predicts the supply crunch will make even more American companies look north: "Whether an American company calls us directly or if he calls a wholesaler in his own backyard, somebody will still have to call up here to get the wood." Olympic Industries is the only Canadian-based of the 10 companies owned by Forest City Trading Group, Portland, Or., yet nearly 857o of their sales are o the U.S.

And it seems that Canada should also be able to better service its own wood products. "If somebody orders Canadian spruce or cedar, in our opinion we are better able to service him because we see things from the mill's point of view, as opposed to the U.S. wholesaler calling the Canadian market at the customer end," Alsop says. "We're more in touch with the supply end of it. We visit the mills frequently and have established relationships with them. We see the people, the plants and the products. We're better able to understand their problems, and the politics of the country and of the province. However, if they want southern yellow pine, now that's a different story."

The difference in currency doesn't present too many difficulties since many C-anadian wholesalers and mills are constantly buying U.S. funds and handle the exchange internally. "The rate of exchange is no problem," claims Chris Lunn, Black Tusk Forest Products, Langley, B.C. "It's just a part of doing business."

"It's all worked out in the pric€," adds Alvin Otsig, Allmar Lumber Distributors, South Burnaby, B.C. "It's all priced out. But a good time (for U.S. companies) to buy is when their dollar is high and ours is low."

Canadian companies have been up against the 6Vo countervailing duty, but most think it won't hold. "Like many Canadian companies, we choose not to take the duty out, figuring we will get a refund anyway," says Alsop. "We also can't know where shipments will end up; we may be selling to a reloader who's going to turn around and send it someplace else. But we are of the opinion the duty will not hold and all the monies collected will be refunded."

Marson sees a growing U.S. reliance on Canadian wood. "In the long-term, my personal experience is yes, it will increase. The timber supply situation in the Northwest doesn't seem to be getting any better, and we will become more dependent on our neighbors 0o the north."

Canadian Softwood Species Groups

(ittdividrul specigs h each grory hon similar strength /qpeamtce)

Spruce-Pine:Fir- spruce (except coast Sitka spruce), jack pine, lodgepole pine, balsarn fir, alpine fir

. Douglas fu-Larch - Douglas fr, westem larch

. HemFir - Pacific coast hemlock, amabilis fr Northem Species - western red cedar