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TABLE OF CONTENTS Mar 2007 - 0 comments

Looking Forward to the Opportunities

Interview With Dr. Ian De La Roche

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By: Anya Orzechowska
2007-03-01

Members of Paprican, FERIC and Forintek voted to merge their institutes into one of the world's largest forest sector research institutes in order to better meet the opportunities and challenges of the Canadian forest industry. The importance of this merger was also made clear by the appointment of Dr. Ian de la Roche as the president and CEO of the newly created FPInnovations.

It's a perfect fit, as natural as the fibre that forms the basis of this industry: the choice of Dr. Ian de la Roche as the CEO and president, to spearhead FPInnovations, the newly created forest sector research institute that is a consolidation of FERIC, Forintek and Paprican.

His own versatility in the field is a product of 30 years of experience that encompasses academics, research, government and management, as well as 15 years as the president and CEO of Forintek. Prior positions including Assistant Deputy Minister at Western Economic Diversification and, later, Assistant Deputy Minister at Agriculture Canada, provided a depth of knowledge in building industry-government partnerships.

"Initially it was difficult to leave research and accept a management position but, in terms of managing researchers, there's nothing like having a technical background so you can understand the research environment a little more," Dr. de la Roche said of his early experience.

Asked about the benefits of creating FPInnovations, de la Roche had a strong reply.

"This now makes us the largest private forest product R&D organization in the world," he asserted. "Coupled with the new Board that represents a broad spectrum of senior industry and government representatives from across the country, means that the institute can speak with a very powerful voice."

De la Roche pointed out the opportunities that this will bring to the new institute in terms of drawing in other R&D players from the sector, both from universities and other organizations.

"In fact, one of the big ones," he enthused, "involves the Centre intégré en pâtes et papiers (CIPP)." What impressed him at the official opening of CIPP in February of this year was the upbeat, dynamic nature of the group and the tie-in they have with personnel at Paprican. "I really see an opportunity to build strong linkages there." Another opportunity will be to expand on the strong alliance Forintek has with the Alberta Research Council into other areas of importance to FPInnovations.

De la Roche was confident about the integration of the new institute from the former separate bodies of FERIC, Forintek and Paprican, as well as the Canadian Wood Fibre Centre. "One of the things about the new institute: its creation was driven not only by the industry, with the idea of more research synergies, but by different levels of government that were so keen on this."

According to de la Roche, the new institute will address issues and opportunities along the full length of the value chain, including harvesting, the upstream aspects of silviculture, pulp and paper manufacturing, wood products manufacturing, and market related issues.

"It's a highly-qualified, innovative workforce, all along the industry's value chain," he said, as an acute observer of the complex relationships involved. "The research institutions will be researching new products, processes, applications and markets. So, if you're talking about diversification in the pulp and paper side, you could be talking about innovations in papermaking, specialty products or bio-refining. Diversification on the wood products side can mean new solutions in building systems, such as hybrid structures, that use wood in combination with other materials such as steel and concrete for non-residential applications."

De la Roche went on to explain that a key objective of the new institute is to develop and apply technologies that will enable us to extract maximum value from Canadian fibre. This means looking at ways to add value along the full length of the value chain. The first step is to fully understand the product attributes demanded by the customer and then to relate those attributes back to the wood quality characteristics of our resource. Genetics, tree improvement, silvicultural practices and harvesting can all serve to add or enhance attributes to fibre which best meets the specific needs of the marketplace. The subsequent steps in the value chain, including manufacturing, can also serve to enhance attributes or add new ones. FERIC, Forintek, Paprican and the Canadian Wood Fibre Centre, as divisions of FPInnovations, each have a unique and complementary role to play along the value chain. "I'm very excited about the synergies we will realize when all of us can work more closely together, particularly when it comes to tackling the bigger and more complex issues facing our sector," he added.

International collaboration is also on the agenda. De la Roche is well aware of the potential benefits as well as the challenges. "You have to make sure that the areas within which you collaborate are areas of mutual benefit, while those areas that are proprietary or of direct competitive advantage have built-in safeguards for our members."

He then said, "It's a question of judgement and how you handle it so as not to give unnecessary competitive advantages to some other group."

With this collaborative approach to problem-solving, de la Roche also sees many benefits to the integration of the research facilities that formed the basis of FPInnovations.

"There definitely are meaningful gains in the research areas as well as efficiencies in how we do things. And this is something that we are looking at. Consolidation can also create 'economy of scale' opportunities for more targeted investments that will give a bigger return from that investment. So rather than just focus on cost, we will also look at the investment opportunities.

"Besides specializing in different areas of the industry, FERIC, Forintek and Paprican have developed different strengths and some unique approaches over the years," de la Roche made clear. "For instance, Forintek's relationship with universities has been built around Chairs -- they currently support six chairs across the country. They fund students, etc. but nothing as structured and formal as what Paprican upholds. Paprican has done a marvellous job of tying universities into its program and membership. And I think that this approach is a good benchmark for the other divisions in the new institute. Forintek has a large network of people in regional offices and that means customized local delivery. FERIC has been tremendously successful in working closely with its members in technology implementation in the forest. These are just a few of the areas where we can share 'best practices'.

"We have the opportunity to further optimize our working relationships with our members and with universities," said de la Roche. "I'm quite excited about that. It will raise the bar to another level.

"Very much, my philosophy has always been that a research organization has to not only generate knowledge but also to look outward and access the global pool of knowledge. The essence of a good research institution is centred around its core competencies and its capacity to grow its knowledge base. I call it 'growing the brain'. Our success will be measured by how well we process, manage and transfer information to our members."

When asked about the challenges facing the industry and those facing the institute, de la Roche replied, "The industry challenges are the institute's challenges because we are partly funded by industry and that funding is based on their success and long-term economic health. The closures, downsizing and consolidations in the industry lately have had an effect on industry investments in the institutes.

"The issues facing the forest products sector are complex. Currency exchange fluctuations and offshore competition, such as South America with commodity pulp, are certainly major factors. Eastern Canada now has some of the highest fibre costs in the world and low worker productivity has also become a significant issue. Customers are more demanding -- they are interested in finding solutions for their housing needs, not just 2x4s. This means shifting some of the emphasis from commodities to specialty products and services.

"Also, there is a need to create a more favourable business and regulatory environment if we are to rebuild an industry that is once again the global leader. Obvious areas that quickly come to mind are: more flexible timber tenure systems; more flexibility from the Competition Bureau to permit consolidation and rationalization within the industry; and free movement of logs, inter-provincially."

While there is no single magic bullet, technology has an important role to play in addressing several of these issues. FPInnovations, with financial investments from industry and governments and the support and collaboration of its research partners from universities and other institutions, can make a difference in this regard.

"FPInnovations is based on a public-private partnership and as such, the challenge will be to balance the needs of government and industry members," de la Roche said. "The challenge will be to find the common ground which in his experience is not as difficult as it would appear.

"The primary needs and expectations of government and industry can be captured under three broad categories -- economic, environmental and social -- often referred to as the 'triple bottom line'. For industry, this implies profitability, environmental and social license to access the fibre and happy, productive workers. For government, the needs are for stable communities, employed citizens, sustainable forests and a globally competitive industry. Clearly, the needs of government and industry are common, but weighted differently. Once the commonalities are understood, we have the basis for a strong partnership that shares the priorities, shares the costs, shares the risks and shares the benefits."

In de la Roche's opinion, the recent announcement for research and innovation funding by the Minister for Natural Resources Canada, Gary Lunn, is a testament to the government's commitment to FPInnovations and the public-private partnership approach.

De la Roche was quite clear on the linkages and the partnerships that will be built as a result of this funding. He added, "this investment builds on other recent actions taken to strengthen innovation in the forest sector."

He acknowledged the contribution of the institute Boards and FPAC who were very instrumental in terms of making sure that the government put emphasis on investment in technologies which will help transform the industry back to global competitiveness.

"In fact, there are three key components for success," he explained. "One is what I refer to as the federal innovation agenda, the second is how that links to the long-term competitiveness of the sector and the third encompasses the new investments in research that can help bring it all together."

De la Roche believes that while the onus for ensuring the continued investment in research in Canada is the responsibility of both government and industry, there will have to be some obvious returns for both parties. "They will be looking for both short-term and long-term benefits," he said, adding, "we will need an accountability framework that will give investors the assurance that this will have a considerable impact over the short- and long-term."

Transformative technologies provide a powerful opportunity in the longer-term. After visiting many of the CEOs and staff of Paprican membership, de la Roche admitted to being struck by the opportunities in biorefinery, nanotechnology, and other innovative technologies that could help reposition Canadian paper products.

"I was particularly impressed by the interest in biorefining from the government and industry in Alberta. And that interest goes beyond the forest sector into the gas and oil industry. The latter is interested in diversifying into renewable sources of energy. What's the difference between a tree and a barrel of oil? A few million years and pressure, that's all. Lignocellulose from trees can potentially be sources of energy and biochemicals similar to what we now produce from fossil fuels. On the one hand, you've got oil and energy companies that know refining and are flush with a lot of cash. On our side, we have our people who know trees and how to process lignocellulose. What a partnership that could be."

From this, de la Roche commented on the long-term future for forest products. "This planet cannot continue to exponentially consume limited supplies of non-renewable energy and chemical feedstocks while generating increasing amounts of greenhouse gases and other air and water pollutants. Clearly, we are at the tipping point where the planet's non-renewable resources will no longer sustain demand. Alternatives will have to be found and soon. It's only a matter of time before the world embraces the notion of the bio-economy. Lignicellulose from trees and agricultural residues will ultimately become the principal feedstock for the energy and for many of the products demanded by tomorrow's customer."

"Wood fibre is an incredible material, it traps sunlight and sequesters carbon dioxide. It can shelter us in renewable, environmentally friendly wood structures. It can provide for practically all of our energy needs. Cellulose can be the basis of the fabric in our clothing and the feedstock for a wide array of chemicals and products that are essential for comfortable living.

"Trees are definitely the answer," de la Roche affirmed. "The Canadian forest products industry is well positioned to lead the transition from the old to the new bio-economy. Are we up to the challenge?"

CIPP: FROM DREAM TO REALITY

"Researchers are dreamers by definition and projects like the CIPP originate from dreams. I wish that we, as an industry, will continue to dream," commented Patrice Mangin, General Manager of the Centre intégré en pâtes et papiers, at the official inauguration ceremony on February 2nd in Trois-Rivières. The ceremony took place in front of several hundred guests in attendance, including representatives from government, education and business. The event began at the theater of the Cégep de Trois-Rivières with speeches by the main dignitaries and partners in the project, followed by a video simulation in which a switch was thrown to power up the equipment at the CIPP. Guests were then escorted by shuttle for champagne and a visit of the new facilities located on the UQTR campus. Constructed over the past 20 months, the 4-storey CIPP building houses mainly laboratories, offices, a pilot pulping plant and a complete paper machine (drainage, pressing, drying). All eyes were on the machine during the visit, which can produce up to 1000 metres/minute of paper (dry sheets) and can also run at low speed (60 metres/minute) for teaching purposes. Startup phases for the machine are scheduled for early spring, with full functionality by the end of April.

Reunited on the picture for the "switch powering" ceremony are (from left to right): André Gabias, Trois-Rivières Representative at the Quebec National Assembly; Bruno Tremblay, Chairman of the Board, CIPP; Ghislain Bourque, Dean, UQTR; Honourable Jean-Pierre Blackburn, Federal Labour Minister and Minister of the Canadian Economic Development Agency; Pierre Corbeil, Quebec Minister of Natural Resources and Wildlife; Julie Boulet, Quebec Transportation Deputy Minister and responsible for the Trois-Rivières region; Christian Muckle, General Manager, Cégep de Trois-Rivières; and Patrice Mangin, General Manager, CIPP.

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