Alberta Forrest
Posted By AFPA |

Forest Sector Remains a Bright Spot in Alberta’s Economy…

Stronger pulp and panel prices lead to 5% growth in 2015

Edmonton, April 11, 2016 – Economic output by Alberta’s forest sector grew in 2015, marking the fourth consecutive year of increases. The forestry sector saw the value of its products rise by 5% – or $150 million – last year, following growth of 8% in 2014, 14% in 2013, and 9% in 2012.Lumber, pulp and paper, and panelboard manufactured by Alberta Forest Products Association (AFPA) members in 2015 was valued at approximately $3 billion. The most significant gains came from pulp and paper, which grew 16%. Panel also had a strong year, with 7% growth. Lumber production values declined by 5%.

“Alberta’s forestry sector is strongly diversified,” said AFPA President and CEO Paul Whittaker. “This is due not only to product and market diversification, but also to investment in new areas. In addition to traditional products, the industry continues to make progress in converting waste streams into green energy and exploring new opportunities in bioproducts. Just last week, West Fraser opened a plant at their Hinton operation that will recover lignin from waste streams for use as a renewable substitute for products derived from fossil fuels. This type of innovation has built a forest industry that will play a critical role in an economically diversified Alberta.”

Alberta’s forest industry is a significant contributor to 70 Alberta communities. 15,000 Albertans work in the industry and an additional 30,000 are employed through economic activities generated by the sector.

Alberta’s forests cover 38 million hectares, an area approximately the same size as Japan. Our forests are managed according to some of the world’s most rigorous standards, including legally mandated regeneration of harvested areas and detailed forest management plans that include public consultation and consideration of ecological, recreational, and economic values.

More information can be found on our website at albertaforestproducts.ca.

The Alberta Forest Products Association is a private, non-profit industry organization, representing lumber, panelboard, pulp and paper, and secondary manufacturing wood products companies operating in Alberta. AFPA member companies are active participants in sustainability advancements that contribute economic, environmental, and social benefits for Albertans.

Media contact:
Brock Mulligan
Director of Communications
p) 780.392.0751
c) 780.239.6890
e) bmulligan@albertaforestproducts.ca

BACKGROUND INFORMATION
Key Issues in Forestry

ECONOMIC DIVERSIFICATION – A strong forestry sector is a key part of Alberta’s diverse economy. The sector directly employs 15,000 Albertans and creates jobs for 30,000 more people through its economic activity. Having a strong forestry sector helps to mitigate the impacts on communities when prices for other commodities falter. The industry relies on a predictable wood supply to continue to create jobs and contribute to economic diversification.

GREEN POWER GENERATION – The forest sector is a key part of Alberta’s efforts to address climate change. Forests are our best defence against climate change, since they sequester carbon. Sustainable harvesting operations prevent carbon from being released into the atmosphere as a result of forest fires. Alberta’s forests cover 38 million hectares, an area equivalent in size to Japan. Using residuals (bark, sawdust, etc.) the sector generates enough power for 3 to 4 cities the size of Grande Prairie. Power produced from forestry residuals has a lower carbon footprint than fossil fuels and comes from a fully renewable source.

THE SOFTWOOD LUMBER AGREEMENT – The Softwood Lumber Agreement with the United States expired on October 12, 2015. Upon expiration of the agreement, both Canada and the United States entered into a one year ‘standstill period’ during which both sides are prohibited from taking unilateral action, including imposing duties or tariffs. Achieving a new agreement is critical for Alberta’s forest sector, as the United States is its largest export market for lumber. The sector will work closely with the Government of Canada and the Government of Alberta to provide the information necessary to negotiate a new agreement.

Sector Analysis
LUMBER – AFPA-member companies produced 3.5 billion board feet of lumber in 2015 with a value of $1.2 billion. Part of this production came from the secondary manufacturing sector. Compared to 2014, production volume increased by 189 million board feet (5.7%), but weaker lumber prices caused values to decline by $66 million or 5%.

PANELBOARD – AFPA-member panelboard operators produced 1.1 billion square feet of 7/16 inch equivalent product in 2015 valued at $388 million. Compared to 2014, production increased by 7 million square feet (0.6%), and significantly stronger prices caused values to increase by $27 million or 7.4%.

PULP & PAPER – The AFPA’s pulp and paper sector production for 2015 was 1.6 million air dried metric tonnes (ADMT) valued at $1.4 billion. Production increased 71,500 ADMT (4.8%) from the same period in 2014, and stronger prices caused values to rise by $191 million or 15.7%.

Alberta’s Forest Industry by the Numbers
15,000 – Number of people directly employed by the industry
2 – Number of spinoff jobs created for every forest industry job
70 – Number of communities that are supported by the forest industry
4 billion – Number of dollars generated annually by the forest industry for Alberta’s economy
320 – Megawatts (MW) of power generated by Alberta’s forest industry using materials that were previously wasted
80 – The City of Grande Prairie’s approximate power demand (in MW)
0 – The number of additional trees that are cut down to make power (only by-products like bark and sawdust are used for power generation)
65 million – Number of trees planted by the industry in 2015
1.5 billion – Dollars of capital investment by Alberta’s forest industry between 2011 and 2015

Production Figures and Values – (2014 and 2015)

Lumber

2014

2015

Year/Quarter

Production

(mmfbm)

$C Value

(000,000s)

Production

(mmfbm)

$C Value

(000,000s)

1st Quarter

746.4

$301.6

822.3

$311.8

2nd Quarter

871.5

$318.2

896.4

$298.8

3rd Quarter

883.9

$342.3

838.4

$297.6

4th Quarter

806.8

$342.8

940.3

$331.1

Yearly Totals

3,308.6

$1,304.9

3,497.3

$1,239.3

Source: Random Lengths (S-P-F, Western Kiln Dried 2×4, STD&BTR, Random, Prices Net FOB Mill)

 

Panelboard

2014

2015

Year/Quarter

Production

(mm sq ft)

$C Value

(000,000s)

Production

(mm sq ft)

$C Value

(000,000s)

1st Quarter

290.9

$91.5

301.1

$96.2

2nd Quarter

289.8

$91.2

282.1

$88.4

3rd Quarter

264.3

$85.2

271.5

$98.5

4th Quarter

286.6

$93.5

284.0

$105.0

Yearly Totals

1,131.6

$361.4

1,138.7

$388.2

Source: Random Lengths, Madison’s Lumber Reporter

 

Pulp and Paper

2014

2015

Year/Quarter

Production

(Thousand Air Dried Metric Tonnes)

$C Value
(000,000s)

Production

(Thousand Air Dried Metric Tonnes)

$C Value

(000,000s)

1st Quarter

388.5

$324.9

378.1

$341.6

2nd Quarter

391.3

$318.6

376.3

$331.2

3rd Quarter

339.9

$268.2

401.3

$371.8

4th Quarter

365.0

$308.5

400.6

$366.7

Yearly Totals

1484.7

$1,220.2

1,556.2

$1,411.3

Source: Pulp & Paper Week – Resource Information Systems Incorporated

CUMULATIVE TOTALS – ALL AFPA SECTORS

Full Year 2014      $2,886,410,000
Full Year 2015   $3,038,762,000
Brock Mulligan
Director of Communications
p) 780.392.0751
c) 780.239.6890
e) bmulligan@albertaforestproducts.ca

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