Asian log buyers outbidding B.C. mills
VICTORIA – Forests Minister Steve Thomson plans to visit a Surrey-based forest company next week to discuss a shift in log export policy that producers say is diverting more B.C. logs to Asian buyers willing to pay up to twice as much as B.C. mills are offering.
Thomson was peppered with questions in the legislature for a second day Wednesday about his ministry overruling its Timber Export Advisory Committee (TEAC) and allowing log exports despite an offer from Teal Jones Group to buy the logs for its B.C. mills.
Teal Jones chief financial officer Hanif Karmally said Wednesday the company is ramping down production and shifts due to a lack of log supply. It could put another 100 to 115 people to work if it had more logs, particularly to feed its small log mill.
Teal Jones' Surrey operation is the largest lumber producer on the B.C. coast, with a large log mill and shake mill in addition to the small log mill it opened in 2003 after a $30 million investment.
Total coastal log exports increased to a record 5.87 million cubic meters in 2011, up from 3.86 million in 2010, according to forest ministry figures. That includes logs exported from private land, which are regulated by Ottawa. About 20 per cent of logs from Crown land in coastal B.C. are going to export.
Thomson told reporters the TEAC changed its policy on how it declares logs as surplus to domestic needs, and how it calculates the domestic market value.
Cowichan Valley NDP MLA Bill Routley told the legislature that Nanaimo-based Coastland Wood Industries as well as Teal Jones is seeing a log shortage.
"I've been told by mill managers that more B.C. mills will be gone if this level of raw log exports continues," Routley said.
Truck Loggers' Association executive director Dave Lewis says B.C. has restricted coastal log exports for decades, but it has not solved the industry's basic problems.
"Domestic buyers can only afford to pay $60 for a log that costs $78 to harvest," Lewis said.
The TLA organized a forum on log exports to counter criticism of log exports.
"To put things very bluntly from a Terrace area perspective, if log exports were banned today, we might as well close the doors and throw away the keys," said Bill Sauer of the North West Loggers Association.
Teal Jones co-owner Dick Jones said his company is not averse to log exports provided the rules are followed, and TEAC decides if logs are offered at fair market value and declared surplus.