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Industry News (November 01, 2008)

Weyerhaeuser named to DJSI


November 1, 2008
By Pulp & Paper Canada

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Weyerhaeuser named to DJSI

Federal Way, WA -Weyerhaeuser has been named to the Dow Jones Sustainability Index. The first North American forestry and paper products company to be included, Weyerhaeuser’s economic, environmental and social performance will now be tracked on the index.

The Dow Jones Sustainability Index was launched in 1999 to keep track of the market performance of sustainabilitydriven companies worldwide. The annual review is based on an assessment of economic, environmental and social performance indicators, and covers corporate governance, risk management, labour practices, climate change and supply chain factors. The results are available to asset managers around the world.

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Weyerhaeuser says the third-party evaluation of its practices demonstrates its commitment to sustainability.

Bioenergy workshop highlights challenges

Washington, DC -A bioenergy workshop held by the AF&PA in September highlighted the challenges that need to be overcome in order to position bioenergy as a combatant against climate change and a provider of energy independence. Emphasis was on how to achieve these goals without unnecessarily distorting fibre markets that are critical to the operations of the forestry industry.

Economists, technology engineers and policy experts attended the workshop. Rocky Goodnow, a senior timber economist for RISI, noted that increases in demand from biomass will come from cellulosic biofuel, electricity and pellets, and that supply of biomass will increase in response to market forces. He expects this will place upward pressure on wood prices, but they will partially be constrained by the need for wood to compete with other forms of bioenergy.

Markku Karlsson, senior vice president of technology for UPM-Kymmene said changes are required in order to prevent bioenergy demand from outstripping supply. He pointed to new cultivation and harvesting technologies, increased interdisciplinary research, and technological innovations that will help maximize energy yields in a manner designed to bring added value to businesses.

John Cowie, director of technology management and development, Agenda 2020 Technology Alliance, indicated bioenergy presents opportunities for the forest products industry, because higher output of biofuels per ton of feedstock can be achieved when the biorefinery and the pulp mill are integrated. Biorefineries generate considerable waste heat that can be put to good use by an associated pulp mill, he noted.

Sun not setting in New Brunswick

Fredericton, NB -Reports commissioned by New Brunswick’s government say there may be hope for the province’s forest industry, provided it can grow more trees.

According to Canadian Press, two recently released reports -one on wood supply, the other on investment possibilities -offered the New Brunswick government a list of options designed to assist the province’s forestry sector before it succumbs to irreparable damage.

According to Don Roberts of CIBC World Markets and the author of the investment report, the industry is indeed suffering an acute crisis. However, he said opportunity is ripe for forward progress.

“I don’t mean to be flippant, but a crisis is a terrible thing to waste,” CP quoted him, as the reports were made public in Fredericton. “You’ve suffered the pain, now use it as a reason to make some changes. You’re at a fork in the road, quite frankly. A lot of jurisdictions are.”

Roberts noted challenges of draconian energy and wood prices are migrating to other areas of the world, subsequently reducing their competitive advantage.

CP further confirmed Roberts as cautioning that if the province wants to capitalize on the advantages of its forestry sector to foster greater wealth, it will simply have to grow more trees.

The other released report focused on methods designed to increase wood supply. A total of seven suggestions were highlighted and the province’s Liberal government is expected to render a decision on which options it will pursue by the end of the year.

No helping hand for Alberta

Jasper, AB -The news isn’t as positive in Alberta, where the province’s forest sector is being told not to expect government bailouts or subsidies, Canadian Press reported. Alberta’s ailing industry is instead being cautioned to prepare for shifts in the way business is conducted.

CP reported Sustainable Resources Minister Ted Morton as saying the government’s sale of timber to companies and the forestry tenure system have been problematic, and that a new business model is being devised. The model will be put in front of cabinet later this year.

Other alternatives include charging forestry companies commercial lending rates for outstanding timber fees and promoting the use of Alberta wood products in government construction projects, CP confirmed.

Closures in Quebec

Montreal, QC -The month of October was a challenge for nearly 900 forestry workers in Quebec as AbitibiBowater idled four sawmills and woodland operations in response to slumping housing starts in the United States.

According to a report by Canadian Press, a sawmill in Thunder Bay also faced reductions in work hours, but no employees will lose their jobs.

On Oct. 6, AbitibiBowater’s facilities in Lebel-sur-Quvillon, La Tuque and St-Flicien closed for four weeks. Senneterre’s shifts were reduced after a two-week closure.

Company spokesman Pierre Choquette said the facilities churn out two-by-four studs that are used in residential construction projects. The price for the studs has plummeted to $260 per 1,000 board feet, the lowest they have sold for since 1991.

In Thorold, Ont., the company closed its recycled paper mill for the month of November, leaving 300 workers without pay. The facility is scheduled to reopen on Dec. 1.