New Brunswick Telegraph-Journal


Charles Mandel

Can the forestry industry be saved?; Economy 'Perfect storm' is brewing as trade and market forces batter our mills

Wood chips aren't much to look at: rough, blond-coloured tree scraps, smaller than matchbook covers. But what was once the unusable debris from a chainsaw's bite into a tree is now a vital part of the lumber industry, the chips themselves a sign of just how much forestry has changed as firms work to make every inch of a tree count.

Wood chips are small, but the machines and processes that produce them are not. The forestry industry is a massive and complicated business most of us take for granted except for when, say, a pulp mill collapses, sending hundreds of fellow New Brunswickers to the unemployment lines. Then the business might register briefly in our newspapers, a product coincidentally made from the very trees we don't often give much thought to - except perhaps as scenery as we race over highways from Saint John to Moncton, or Fredericton, past the seemingly interminable wooded hills.

Last August, among the steep hills and glittering lakes of Cambridge Narrows - about an hour's drive north of Saint John - four-wheeled pieces of machinery known as skidders grappled bunches of thin trees in their mechanical claws and lumbered over uprooted stumps and overturned clumps of earth. This could be considered ground zero of the industry: the harvesting grounds. In order to better understand why New Brunswick's, and Canada's, forestry industry is struggling, the Telegraph-Journal traced the path of a tree from the moment it was cut to when it arrived on a store shelf as a product, in this instance tissue paper. This is the process the industry crassly calls "from stump to rump."

Walking over torn-up logging grounds, touring the oversized and weirdly mysterious automated pulp mills and looking at complicated geographic information systems maps, one thing becomes clear: the men and women who work in the industry do so because they love the woods and the land.

Certainly, it's not money that led Jack McMillan to invest in the $900,000 flail chipper that was roaring away as the skidders dropped their loads of skinny trees in front of the red two-storey machine. McMillan, 52, said he got into forestry after graduating high school. "That's what I did: took my own chainsaw and went to the woods."

Today McMillan, a big man with salt-and-pepper hair and a pack of smokes tucked into the breast pocket of his black polo shirt, is J.D. Irving, Limited's top-producing chipper operator, in charge of a team of 40 men.

As the spicy smell of chopped fir trees filled the air, the chipper's grapple hook grabs a load of trees and feeds them into the maw of the dinosaur- like machine. A methodical snapping and crashing drowned out conversation as chains inside the chipper beat the bark and limbs off the trees before passing them along to three sets of blades spinning at 450 revolutions per minute, which shred trees to wood chips. At the rear of the chipper the tiny wood fragments spray out at 130 miles per hour into the rear of a 53-foot Western Star trailer tractor. It takes 40 minutes to fill a truck, another two hours to drive to Saint John. The chips could be in the mill in under three hours. As soon as one truck pulls away, another backs in its place. Work on the site goes 24 hours a day, seven days a week. The chipper has a voracious, never-ending appetite, much like our appetite for wood.

Canada is the world's largest exporter of forest products, shipping out $41. 9 billion of softwood lumber, newsprint, wood pulp and other products in 2005. The industry as a whole was worth $80.3 billion in 2005 and employed 864,000 people. New Brunswick accounted for $1.9 billion in exports - 11.2 per cent of the provincial GDP - and employed 17,700 individuals or 1 in 11 jobs in the province, paying a total of $697.5 million in 2004. But despite the impressive numbers, it's no secret that the industry is troubled. A federal government report entitled The State of Canada's Forests 2005-2006 notes: "With unfortunate timing, a series of domestic market and trade forces are converging on the forest sector, brewing what some observers have called a 'perfect storm. '"

New technology, the collapse of the American new home market, and a seemingly endless supply of cheap wood from South America are chipping away at the forestry industry's profitability. Eastern Canada, particularly Quebec and New Brunswick, are facing a number of challenges. The federal government report describes the future for pulp and paper as "grim," noting the industry is "saddled with steep production costs, largely because of expensive energy; high delivered wood costs...and production inefficiencies arising from the small aging mills."

Those problems have hit New Brunswick hard in the last couple of years, with three mills shutting down, although one - St. Anne Nackawic - has since been revived and retooled to produce a specialty dissolving pulp for use in clothing. Others in the province have experienced losses, including Finnish company UPM- Kymmene's Miramichi mill, which recently declared a $163 million loss on the value of its mill, and Dalhousie mill operator South Carolina-based Bowater Inc. , which reported a $16.1 million third-quarter loss. As well, mills in Juniper and Plaster Rock and elsewhere have been temporarily shut-down. The lost jobs number in the hundreds.

So what do wood chips have to do with mill closures, job losses and the larger economic forces at work? Back at Cambridge Narrows, Andrew Willett shows a crooked, rotting maple, a tree that in the past loggers would have discarded as trash. However, the chipper takes that garbage tree and turns it into a valuable commodity: wood chips, which can then become consumer tissue. It's low- quality materials turned into a high-value product, according to Willett, an operations superintendent with J.D. Irving, Limited.

Even so, everything is about beating the margin in order to make a profit. McMillan runs shifts seven days a week, with 12-hour shifts in the summer, 10- hour over the winter. He is on the job himself at 5 a.m. and doesn't leave until 10 at night. McMillan admits he might be micro-managing, but even so down- time for the machines adds up to $300 an hour plus costs. "The name of the game is produce, produce," he says.

TOMORROW: Adapt or die - how the industry is transforming itself in a drive for greater efficiency.