By Christopher Williams
While forestry has sustained the Atlantic Canadian economy for centuries, soft markets for paper, the global recession, the anemic recovery of the past few years, and chronic under-investment in plant and equipment led to painful mill closures and other adjustments in the industry. Efficient transportation and cargo handling to get products to market has never been more instrumental in helping producers remain profitable.
New Brunswick in particular has the most forest intensive economy of any province in Canada. Some forestry firms have been successful in adopting innovative approaches to reduce input and/or transportation costs. Others are moving out of low value-added commodities and into products in which they can better protect their investment and withstand market fluctuations. “There have been tough times and yes, we are struggling, but things are turning and getting better,” said Mark Arsenault, President and CEO of the New Brunswick Forest Products Association.
Despite the recent turmoil, the forest products sector is still vital to New Brunswick’s economy. Wood producers felt some reprieve last year from improvements in the American housing sector, the urgent need for lumber following Hurricane Sandy and a tsunami in Japan, as well as growth in China as an export market for construction supplies and pulp demand in Asia.
According to Statistics Canada, New Brunswick remains the most forestry dependent province in Canada, with per capita exports of paper and wood products of $2,061, compared to $1,894 in British Columbia, the runner-up. Transportation being a key link in the forest products chain, Mediterranean Shipping Company’s (MSC) new weekly container service from Port of Saint John is being heralded as a major logistical advance.
Port of Saint John is well-positioned to receive forest products exports by rail and truck. International shipping lines from Star Shipping to Wallenius-Wilhelmsen have called the port for decades to take advantage of expert forest products handling at Navy Island and Rodney terminals where exports range from a half-million tonnes to over a million tonnes per year.
New Brunswick – Potential for Biomass
MSC’s weekly global service is creating tremendous opportunities in New Brunswick. “We are now working enthusiastically with interested parties in the biomass sector to identify future facility options in Port Saint John,” said Jim Quinn, President and CEO of Saint John Port Authority. “We are also seeking new export opportunities from Maine because MSC’s global connections open doors to new markets for shippers in the northern U.S.”
Biomass is the biological material that is derived from forests, vegetation and agricultural production, and is the basis for making renewable energy products, and forests represent an abundant source of biomass. There are opportunities in Europe where there is great demand for biomass products as a source of power, and a huge gap exists in the supply,” observes Quinn.
New Brunswick – J.D. Irving – Pulp
Pulp from J.D. Irving, Limited’s (JDI) Irving Pulp and Paper mill in Saint John is shipped by MSC to Brazil, and medium from its Lake Utopia Paper, near St. George, is shipped to Latin America and South America. “We appreciate the convenience of MSC’s direct service to Latin America and South America that allows us to serve valued customers of our pulp and packaging products,” says Mary Keith, Vice President of Communications for JDI.
On the east side of Saint John, Irving Paper Limited produces approximately 900 tonnes per day of pulp from 100 per cent softwood. Combined with bleached kraft pulp received primarily from the Irving Pulp & Paper Mill, and clay fillers, Irving Paper produces approximately 1,200 tonnes per day of specialty paper for the production of flyers, catalogues and magazines (“super calendared” papers).
New Brunswick – J.D. Irving – Tissue paper
Woods chips are the main ingredient to produce pulp from which tissue paper is produced at Irving Tissue on the west side of Saint John. “Parent rolls” of tissue paper weighing five tonnes are trucked up the road about a 90-minute drive to Dieppe, New Brunswick for conversion into consumer products, such as well-known bathroom tissue brands like “Majesta” and “Royale”, as well as the “Scotties” brand of facial tissue. These products are distributed in the U.S. from Dieppe via a network of transportation companies including Midland Transport, RST Industries, Sunbury Transport, NB Southern Railway, Atlantic Towing, Kent Line, Harbour Development, as well as JDI Logistics.
New Brunswick – J.D. Irving – wood chips
JDI’s forest products transportation operations deliver roughly 1,200,000 tonnes of wood chips annually from woodlands and sawmills to the mills in Saint John and St. George to be used as feedstock for the production of pulp. “This equates to about 1,500 truckloads per week,” Keith estimates. She says roughly 15 per cent of these deliveries come by rail through Northern Maine Railway, Eastern Maine Railway and the NB Southern Railway to Saint John. JDI owns and manages over 200 of its own chip railcars to move this volume.
New Brunswick – J.D. Irving – Dispatch
In 2005, JDI implemented a central dispatch system to manage chip trucks and the flow of products to the pulp and paper mills. “Five staff and a computer system manage these logistics using real time satellite positioning to coordinate the movement of the trucks, notes Keith. “The dispatch system has improved the efficiency of our supply chain and we’ve converted the entire broker chip truck fleet to quad axle trailers which are more pavement-friendly and improve payloads by about 12 per cent.”
New Brunswick – Aditya Birla – AV Group
In addition to exports of JDI forest products, Mediterranean Shipping Company ships “dissolving grade pulp” to Asia from AV Nackawic’s mill just west of Fredericton, about an hour’s haul to Port of Saint John. The AV Group is a partnership between Tembec Inc. and Aditya Birla Group, a $28 billion corporation based in India, which operates in 25 countries. Initially, the partnership acquired a failed pulp mill in Atholville, NB, and converted it to produce dissolving rayon grade wood pulp for export to Asia. This facility became known as AV Cell Inc., and supplies some 119,000 tonnes annually of pulp to its sister companies in India, Thailand, Indonesia and China. Subsequently, AV Group acquired the St. Anne Nackawic mill, which was renamed AV Nackawic Inc., to produce dissolving pulp using maple, aspen and birch. The mill produces about 180,000 tonnes annually which is supplied to the viscose plants of the Aditya Birla Group in India, Thailand and Indonesia, for the manufacture of rayon used in textile applications. “Birla Viscose”, is a soft, biodegradable, comfortable fibre, which finds its way into shirts, trousers, diapers, sanitary napkins, tissues, wipes, knitwear, towels and bed linens.
AV Cell’s containerized shipments of about 2,000 tonnes per week are shipped from Atholville by rail and truck to Port of Halifax where they are loaded aboard NYK and Zim vessels destined for India.
David Black, President of Saint John-based Black Transport, says his company had a busy 2012 trucking AV Nackawic products down highway 7 to the Port of Saint John. Recent highway and port entrance enhancements are improving delivery time. “There are about four different trucking companies picking up cargo from the AV Nackawic mill and we are hoping this business continues to grow,” Black commented optimistically.
New Brunswick – Wood chips and pellets – Belledune
Also in northeastern New Brunswick, Port of Belledune has seen an increase in shipping forest products. Group Savoie and Shaw Resources ship wood pellets to European destinations aboard vessels operated by Wagenborg, Flinter and Canfornav. “The wood pellets arrive at the port by truck and are stored at Terminal 3 operated by Eastern Canada Stevedoring,” explains Jenna MacDonald, Director of Marketing, Belledune Port Authority.
Groupe Savoie’s facilities comprise sawmills, pallet plants, component plants, pellet plants and dry kilns in St-Quentin, Kedgwick, Moncton, N.B. and Westville, N.S. Shaw Resources makes industrial pellets for export at its Belledune plant. Another Shaw plant in Shubenacadie, N.S. produces pellets for residential heating.
The European market opportunity for wood pellets has soured somewhat, the result of higher ocean freight rates and increased supplies. Canada’s export volumes are about to increase dramatically as pellet plants under construction are approaching start-up. In addition, U.S. production is being expanded.
Belledune also shipped wood chips in 2012. “These chips are trucked to Belledune from various locations in Eastern Canada and are consolidated on Terminal 3 in an outdoor storage area and destined for markets in Turkey,” says MacDonald. “Although we do not currently receive forest products by rail, we intend to work with CN to develop rail and marine shipping options for forest products.”
New Brunswick – Wood chips – Dalhousie
Forest products volumes have picked up at Belledune’s neighbouring Port of Dalhousie, with wood chips arriving through about a dozen different trucking operators. The port is connected to inland markets via the CN line, and highways located only minutes away.
Brian Hyslop, Director of Business Development for Port of Dalhousie, says expansion plans call for the construction of a third deep water pier capable of handling several post-Panamax vessels at any given time. “This will allow the Port to develop new markets and deliver cost savings throughout the supply chain,” he says. He estimates Port of Dalhousie ships between 4 and 6,000 tonnes of softwood and hardwood chips via NYK and other open hatch vessels every two or three months. The chips are mainly for the production of medium-density fibreboard (MDF) in Turkey. “A second woodchip laydown area now being organized will allow us increase capacity,” added Hyslop.
New Brunswick – Arbec Forest Products
Weyerhaeuser sold its Miramichi mill in 2012 to Arbec Forest Products of Quebec for $21 million, five years after the mill shut down. Arbec Forest Products expects the mill to reach full capacity of 360,000 cubic meters of OSB construction panels. It anticipates that about 30 per cent of future production will be exported overseas.
“Softwood and hardwood will be arriving at the Miramichi mill by truck and about 10 people on site are doing the actual wood handling into the loaders that feed into the mill yard,” says Jeff MacTavish, Director of economic development for the City of Miramichi
Provincial and federal governments provided more than $17 million for Arbec to refurbish the facility and get it up and running. New Brunswick Natural Resources Minister Bruce Northrup says Arbec can harvest about 277,000 cubic metres of mixed hardwood pulpwood and softwood pulpwood, with at least half of its supply coming from private lots.
New Brunswick – Twin Rivers Paper Company
In Edmundston, N.B., Twin Rivers Paper Company produces 370,000 tonnes per year of bleached softwood sulphite and bleached groundwood pulp for conversion into specialty publishing, packaging and label papers by its sister company located in Madawaska, Maine. The company also produces softwood lumber at its mill in Plaster Rock, N.B. The latter also supplies the Edmunston Mill with softwood chips and biomass. A large biomass cogeneration plant provides 79 per cent of the operation’s electricity and has the additional capability of selling up to 38MW to N.B. Power.
Nova Scotia Forest Industry
An Atlantic Provinces Economic Council (APEC) study estimates that Nova Scotia’s forestry industry generates $695 million in provincial GDP, directly and indirectly employs approximately 11,000, and exports about $1 billion worth of products internationally. Although the industry is important to Nova Scotia, it has been subject to considerable turmoil in recent years.
Among recent developments, the province of Nova Scotia negotiated an agreement with Resolute Forest Products and the Washington Post Company in December of 2012 to purchase all Bowater Mersey shares for $1. The province now owns 555,000 acres of commercial and protected woodlands, including the Medway, Rossignol and St. Margaret’s Bay districts (valued at $117.7 million). “Gaining control of these lands and resources allows the province to put them into the hands of those in our forestry industry who will value them most and can best generate more jobs and wealth in the province,” said Nova Scotia Premier Darrell Dexter.
The Dexter government also reached an agreement to reopen the shuttered NewPage paper mill in Port Hawkesbury, Cape Breton. Government loans and a special power rate closed a deal with Pacific West Commercial Corp., which paid $33 million for the 50-year-old facility which its new owners rechristened “Port Hawkesbury Paper LLC”. The mill was shut down in 2011, throwing 600 people out of work and affecting another 400 forestry contractors. Port Hawkesbury Paper has the capacity to produce nearly 400,000 tonnes of specialty paper used to produce magazines, catalogs and newspaper inserts.
In 2011, Paper Excellence Canada Holdings Corp of Richmond, B.C. acquired Northern Resources, the parent company of Northern Pulp Nova Scotia and Northern Timber and a 45-year-old mill in Scotsburn, Pictou County. The mill receives wood chips from sawmill partners and various suppliers, meeting strong demand for pulp in Asia by manufacturing 275,000 tonnes of northern bleached softwood kraft annually, all of it derived from wood fibre. The pulp is then used to manufacture common household products such as tissue, towel, and toilet paper along with writing and photocopy paper.
J.D. Irving is also a forest products producer in Nova Scotia. The company’s Truro sawmill, “Sproule Lumber”, and woodland operations, directly employ 123 in the area. The firm also retains the services of 37 contractors and purchases about $37-million of wood from local sources.
Top containerized cargo in Halifax
“Forest products such as newsprint, paper and wood pulp are our top containerized exports,” says Patrick Bohan, Manager of Business Development at Halifax Port Authority. About a million tonnes of forest products are shipped through the Port annually to markets in Asia, India, China, the Caribbean and Europe.
Shipping lines calling Halifax for forest products include Zim, Hapag-Lloyd, OOCL, ACL and others. Armour is one of the Port’s major trucking partners. “Others includes Day and Ross, Midland Transport, Dynamic Transportation, Guysborough Transfer, Pier Express, Fastfrate and others,” lists Bohan.
Infrastructure improvements that Bohan believes with expedite forest products handling are being completed at Halifax’s South End Container Terminal operated by Halterm Limited, including a new gate complex which will process trucks and make all pick up and delivery paperless. “That follows a recent berth extension in early 2012 by 250 feet,” adds Bohan. “This year, the Richmond Terminal which is the port’s second multipurpose facility is also being expanded by 1,500 feet.”
Halifax Port Authority also manages the much smaller port of Sheet Harbour from which dry bulk and wood chips are exported on shipping lines calling on inducement. Great Northern Timber manufactures and exports forest products from Eastern Canada, using processing facilities and ship loading facilities at Sheet Harbour and at Dalhousie, N.B.
In Newfoundland and Labrador, forestry became an important industry when Newfoundland Wood Pulp Company built a sulphite mill with a daily capacity of 20 tonnes on Placentia Bay. Other ventures followed, such as the Anglo-Newfoundland Development Company and Bowater’s Newfoundland Pulp and Paper Mills. However, following closures of recent years, only one newsprint producer remains, namely, Corner Brook Pulp and Paper, owned by Kruger Inc., and located on the west coast of Newfoundland. The mill’s two paper machines produce newsprint that is renowned for its outstanding printability and is used extensively for colour printing.
The Corner Brook Mill produces 250,000 tonnes of newsprint per year using various trucking firms to deliver wood to the mill. “There hasn’t been a rail connection with Corner Brook since the 1980s,” notes Craig Power, a manager at the Corner Brook mill. He says shipping lines like Gorthon-B&N Transatlantic, of Helsingborg, Sweden, deliver the newsprint to world markets.
To access woodlands, Corner Brook Pulp and Paper builds more than 95 kilometers of access roads annually. While the main purpose of these roads is for forest management operations, the network of roads is open to the public for recreational activities.
“Newfoundland and Labrador are blessed with forest resources which have been a source of employment and raw materials throughout our history,” said Jerome Kennedy, Minister of Natural Resources. “The development of a Provincial Sustainable Forest Management Strategy will ensure the development of the province’s valuable forest resources is undertaken with Newfoundlanders and Labradorians as the primary beneficiaries.”
In remarking on the future of forest industries in Atlantic Canada, Jim Irving, Co-CEO of J.D. Irving, Limited noted that “It is a diverse network of activities – manufacturing, transportation, IT, research and innovation – and there is great potential to grow more,” says. “Ensuring we can compete in the global market is what will realize new jobs, investment and tax revenue,” added Irving. “We can do it from here.”