Articles
On the spot news! · 1st February 2010
Klahoose CCP
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.
A&A Trading Ltd is our log marketing and tenure management company. They have been successful in immediately developing a large cross section of customers for our logs. They are also providing the working capital for this project and marketing expertise. To date, our logs have been sold domestically, to the US, China, Korea and Japan. The response back from our customers has been positive and A&A is developing a long term consistent customer base for our logs.
In order to maximize the value of every tree harvested, last year we developed over 60 different log sorts for our timber. This is in response to specific requirements of various customers around the world.
Looking Towards the Future
Based on A&A‘s forecast we expect some improvement in the log markets for 2010. Housing starts in the US should increase by 20%. Demand in Korea and China will increase this year due to the lack of log supply from Russia. However, the strong Canadian dollar will have a negative impact on our returns since all forest products sold outside of Canada are sold in US dollars. A&A expects a stronger outlook but only if we have access to the global markets and are not constrained by government policies on having to sell logs domestically. Klahoose is working hard negotiating with government to make sure we have unfettered access to all log markets with a $1/m3 export tax. We feel it important to make sure any logs we do sell are deemed surplus to domestic needs first.
As a result of this and A&A’s marketing we plan to harvest our total cut in 2010. We will expand our customer base to increase values on lower end sorts. An example of this is in Hemlock which sells generally for 45% below our costs; A&A trading will be working on increasing the value of these logs by expanding into different markets and branding our log quality.
What this Means for Klahoose First Nation
The New Year brings new opportunity for band members to get trained and learn the skills necessary to be productive and safe in the forest. We already have begun the training process but with a full year in front of us and the opportunity to cut our full annual allowable cut, we anticipate more employment and a strong return on our investment. Qathen Xwegus Management Corporation team is working tirelessly to find different ways of maximizing value from our fiber. We are building on a foundation of team work that will enhance the social well being of people working on site as well as ensuring that the benefits return to the community.
We will have an announcement coming soon that will demonstrate our commitment to bringing value to the community and we feel confident that our membership will be supportive of our efforts.
Chief Ken Brown
End of series.
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.
A&A Trading Ltd is our log marketing and tenure management company. They have been successful in immediately developing a large cross section of customers for our logs. They are also providing the working capital for this project and marketing expertise. To date, our logs have been sold domestically, to the US, China, Korea and Japan. The response back from our customers has been positive and A&A is developing a long term consistent customer base for our logs.
In order to maximize the value of every tree harvested, last year we developed over 60 different log sorts for our timber. This is in response to specific requirements of various customers around the world.
Looking Towards the Future
Based on A&A‘s forecast we expect some improvement in the log markets for 2010. Housing starts in the US should increase by 20%. Demand in Korea and China will increase this year due to the lack of log supply from Russia. However, the strong Canadian dollar will have a negative impact on our returns since all forest products sold outside of Canada are sold in US dollars. A&A expects a stronger outlook but only if we have access to the global markets and are not constrained by government policies on having to sell logs domestically. Klahoose is working hard negotiating with government to make sure we have unfettered access to all log markets with a $1/m3 export tax. We feel it important to make sure any logs we do sell are deemed surplus to domestic needs first.
As a result of this and A&A’s marketing we plan to harvest our total cut in 2010. We will expand our customer base to increase values on lower end sorts. An example of this is in Hemlock which sells generally for 45% below our costs; A&A trading will be working on increasing the value of these logs by expanding into different markets and branding our log quality.
What this Means for Klahoose First Nation
The New Year brings new opportunity for band members to get trained and learn the skills necessary to be productive and safe in the forest. We already have begun the training process but with a full year in front of us and the opportunity to cut our full annual allowable cut, we anticipate more employment and a strong return on our investment. Qathen Xwegus Management Corporation team is working tirelessly to find different ways of maximizing value from our fiber. We are building on a foundation of team work that will enhance the social well being of people working on site as well as ensuring that the benefits return to the community.
We will have an announcement coming soon that will demonstrate our commitment to bringing value to the community and we feel confident that our membership will be supportive of our efforts.
Chief Ken Brown
End of series.
more Toba wood at mill