In terms of accounting, capital expenditures are the funds used by a company to acquire or upgrade physical assets such as property, industrial building or equipment, or else to improve the useful lif…
In terms of accounting, capital expenditures are the funds used by a company to acquire or upgrade physical assets such as property, industrial building or equipment, or else to improve the useful life of an existing capital asset. This type of outlay is made by companies to maintain or increase the scope of their operation.
Although a tradition with Pulp & Paper Canada, this was one of the most difficult issues to put together because of our annual Capital Expenditure report. This article has been one of our flagship features since before my tenure as editor and those of you who have been faithful readers over the years will probably remember the slightly different versions in older magazines. PPC would send a survey to as many pulp and paper companies and mills as possible, breaking down the form into three main categories: mill production facilities, pollution control and energy conservation.
Due to the current economic situation, we have found that, while capital expenditures do continue, they are of a different variety, with a higher percentage of basic maintenance and efficiency improvements as opposed to larger scale projects. In addition, the mills are more reluctant to discuss detail.
Therefore this article has taken a different tack in recent years in order to present relevant information. Carefully researched by Heather Lynch, PPC’s assistant editor, the article reports on the status of known projects in the mills throughout Canada, as well as quoting from interviews with financial experts.
For those reasons, it is not the abundance of detailed information that we used to present but still key to many of the projects on the horizon. It can be said that the industry is striving to define priorities while maintaining stability and we are all still keeping our fingers crossed for improvements in this arena.
On the more optimistic side, the American Forest and Paper Association’s 130th Annual Paper Week provided some refreshing statistics to share with consumers of paper. With growing concern over the environment and the results of human activity in that area, it seems that the image of the paperless office and home are resurfacing due to misconceptions that are being spread irresponsibly.
So several suppliers of the wood and paper products industry in North America came together and formed the Abundant Forest Alliance, with the mission “to provide wood and paper resources for consumers and businesses — today, tomorrow and in the next century — by managing forests for future generations.”
The motto for the AFA is Renew. Reuse. Respect. and one of their main projects is to share information about the many ways the industry paid attention to relevant unease and responded by taking care of the natural resources entrusted to them through sustainable forestry practices, improved recycling and new technologies.
Some interesting facts gathered by the AFA from Natural Resources Canada and FPAC:
* More than 5,000 products are made from trees: houses, furniture, baseball bats, crutches.
* Over a 50-year lifetime, a tree generates $31,250 worth of oxygen, provides $62,000 worth of air pollution control, recycles $37,500 worth of water and controls $31,250 worth of soil erosion.
* Canada is home to 7% of the world’s forests and wooded areas.
* Canada’s forests cover 402 million hectares (nearly a billion acres, or 41% of the land base).
* Canada has about one-quarter of the world’s Boreal forests (forests located in northern regions).
* Canada has 91.2% of its original forest area, only one quarter of which is managed primarily for timber purposes.
* Just less than half of 1% of total forestland in Canada is harvested annually.
* 93% of forestlands in Canada are publicly owned; an estimated 425,000 individuals, families, communities, and forest companies own the other 7% of Canada’s forestland.
* Under the Canadian constitution, the provinces have ownership over 77% of publicly owned forestland.
* Softwood forests in Canada represent 66% of the total forests, mixed wood forests cover 22% and hardwoods account for 12%.
Through careful management, this precious resource is being well cared for. In fact, in the U.S. alone, the forest inventory has increased by 39% since 1952 while the population has almost doubled.
More people should know. Help spread the word.
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