Articles
On the spot news! · 1st February 2010
Klahoose CCP
The B.C. forest Industry is affected by the US Market
As a result of the global economic meltdown we witnessed in 2009 the BC forest industry had one of its worst years on record for production output and profitability. Over 50% of BC lumber sales are into the US. So are industry heavily relies on the number of housing starts in that country. US had the worst decline in 2009 since the 1950’s. Total housing starts were around 550,000 this is off their peak of 2.3 million in 2006.
The total harvest on the coast for 2009 was about 7 million m3 or 50% of the total allowable harvest. For the first half of 2009 cedar sales, domestically were almost zero and prices for logs were down by 20% for the H grade and 38% for the I grade logs.
Creating the New Relationships
During this bleak period our Nation was successful in completing the purchase of TFL 10. We invested considerable resources to begin immediately harvesting in the late spring of 2009. Like any operational start up of this magnitude, there were many challenges to overcome before we could begin to fully capture the revenue potential of the timber within our traditional territory. The following is a list of the initial framework:
•Not only shrinking the government timeline required to transfer ownership of a TFL but also reclassifying the tenure into our very own community forest license RC4. This required many meetings with the Minister of Forests to finally have it approved in September of 2009. This reclassification of the tenure reduced the stumpage we pay government by approximately $25/m3. It will also allow us to harvest on a consistent basis and not worry about stumpage rising during the year as it does for other licensees. Our stumpage is fixed at the beginning of each year and is a fraction of what others are paying.
•Quickly and efficiently developing profitable cutting permits and getting them approved by the Ministry of Forest, to allow immediate harvesting operations/jobs for our community.
•Developed an understanding with Kiewit Construction to use the same road system.
•Accessing timber hydro right of way before the power lines were installed that would otherwise have been isolated and unavailable for harvest.
•Lack of accommodation for our workers at Kiewit’s ‘400 man’ camp required the establishment of our own camp facilities for our engineering and logging crews
Summary of Operations
Klahoose is pleased to announce we have harvested 35,000m3 in only our first 3.5 months of operation with a net margin of $280,000. This does not reflect the full benefit of the stumpage associated with a community forest license since the reclassification did not occur until after the cutting permits were approved and harvesting had begun. Further cutting permit applications will receive the community forest stumpage benefit.
End of part one.
As a result of the global economic meltdown we witnessed in 2009 the BC forest industry had one of its worst years on record for production output and profitability. Over 50% of BC lumber sales are into the US. So are industry heavily relies on the number of housing starts in that country. US had the worst decline in 2009 since the 1950’s. Total housing starts were around 550,000 this is off their peak of 2.3 million in 2006.
The total harvest on the coast for 2009 was about 7 million m3 or 50% of the total allowable harvest. For the first half of 2009 cedar sales, domestically were almost zero and prices for logs were down by 20% for the H grade and 38% for the I grade logs.
Creating the New Relationships
During this bleak period our Nation was successful in completing the purchase of TFL 10. We invested considerable resources to begin immediately harvesting in the late spring of 2009. Like any operational start up of this magnitude, there were many challenges to overcome before we could begin to fully capture the revenue potential of the timber within our traditional territory. The following is a list of the initial framework:
•Not only shrinking the government timeline required to transfer ownership of a TFL but also reclassifying the tenure into our very own community forest license RC4. This required many meetings with the Minister of Forests to finally have it approved in September of 2009. This reclassification of the tenure reduced the stumpage we pay government by approximately $25/m3. It will also allow us to harvest on a consistent basis and not worry about stumpage rising during the year as it does for other licensees. Our stumpage is fixed at the beginning of each year and is a fraction of what others are paying.
•Quickly and efficiently developing profitable cutting permits and getting them approved by the Ministry of Forest, to allow immediate harvesting operations/jobs for our community.
•Developed an understanding with Kiewit Construction to use the same road system.
•Accessing timber hydro right of way before the power lines were installed that would otherwise have been isolated and unavailable for harvest.
•Lack of accommodation for our workers at Kiewit’s ‘400 man’ camp required the establishment of our own camp facilities for our engineering and logging crews
Summary of Operations
Klahoose is pleased to announce we have harvested 35,000m3 in only our first 3.5 months of operation with a net margin of $280,000. This does not reflect the full benefit of the stumpage associated with a community forest license since the reclassification did not occur until after the cutting permits were approved and harvesting had begun. Further cutting permit applications will receive the community forest stumpage benefit.
End of part one.
Highly computerized system used to maximize cutting
Chief Brown meets with Honorable Pat Bell, Min. of Forests & Range
Housing starts in the US
Wood sales