Markets and Market Development
Canfor and Canfor Pulp sell lumber, pulp and paper products in markets throughout North America and overseas through sales offices in Vancouver; El Dorado, AR, Ridgeland, MS, Mobile, AL; Tokyo, Japan; Shanghai, China; and Seoul, South Korea.
In 2016, we continued to build on our reputation as a producer and seller of high-margin lumber products to global markets. Our acquisition of Wynndel Box and Lumber early in 2016 supported this – WynnWood is located in an area of southern British Columbia with exceptional fibre quality and manufactures quality boards and specialty wood products.
Our continued expansion and focus on higher-value products has fuelled our diversification in both products and markets. In January, Canfor executives met with a distribution customer near Shanghai, which is bringing in select grade 2x6 lumber from northern British Columbia. Our product diversification includes metric-sized lumber for Asian customers and high-value lumber for furniture manufacturers.
While our largest market for lumber continues to be the United States, we are shipping more to offshore markets, especially China where there is growing acceptance of North American wood products for construction. Senior sales and marketing staff visited furniture factories in the interior of China to promote the fact our high-grade Spruce-Pine-Fir (SPF) lumber can be used to produce furniture for domestic markets. Our Southern Yellow Pine (SYP), when treated, has proven to be very effective in withstanding termites, which are a problem in Thailand and other Southeast Asia countries.
Following the acquisition of Anthony Forest Products (AFP) in El Dorado, AR, we began integrating the company’s products into the Canfor brand. This included rebranding AFP’s Span Calculator, an app now available free for Android, iPhone and iPad as the Canfor Span Calculator.
In March, we shipped our first order of lumber to Indonesia, Southeast Asia’s second-largest market. Our SYP and SPF products are seen as alternatives as the country faces a shortage of tropical hardwoods. And in October, we again expanded our market presence by confirming an order with a major hardwood distributor in West Malaysia.
We were among the senior executives from forest companies and associations who visited key markets in China and Japan during the BC government’s 2016 forestry trade mission to Asia. The mission included the second-annual Sino-Canada Wood Conference in Shanghai that explored ways BC wood products can help to meet market demands in China and deliver a greener future.
Canfor was at BC Wood’s 12th annual Global Buyers Mission
in Whistler, BC, in September, an event attended by registered international buyers from 20 countries. And we took part in the Philippine Wood Expo in Manila in October.
Two of our BC sawmills, Radium Hot Springs and Elko, provided much of the specialty lumber used in Brock Commons – an 18-storey student residence in Vancouver that will soon be the world’s tallest wood building. Canfor was the only lumber supplier able to provide the specific strength of lamstock that could meet the demanding needs of the wooden columns that hold up each floor. Our mills also supplied about a third of the lumber for the structure’s cross-laminated timber panels. A short time-lapse video
shows how using wood led to completion four months ahead of schedule. The building is expected to open in Fall 2017.
Canfor's Radium and Elko sawmills provided much of the specialty lumber used in Brock Commons.
In October 2015, the Canada-US Softwood Lumber Agreement expired resulting in a 12-month standstill period during which no trade actions could be imposed for the importation of softwood lumber from Canada to the US. In November 2016 a petition was filed by the US Lumber Coalition to the US Department of Commerce and the US International Trade Commission alleging certain subsidies and administered fees below the fair market value of timber that favour Canadian lumber producers. An investigation is underway and Canfor continues to cooperate with the Provincial and Federal Governments of Canada who have indicated they will vigorously defend the interests of Canadian workers and producers.
Most of the lumber destined for North America is shipped by truck and rail, while the vast majority of products sold offshore are transported by container ship and, in the case of pulp export, breakbulk cargo.
Canfor Pulp has two wholly owned subsidiaries that market pulp – Canfor Pulp Japan Corporation in Tokyo and Canfor Korea Ltd. in Seoul. Premium 1 Papers, a sales and marketing partnership between CPPI and Canadian Kraft Paper Industries Limited (CKPI), is responsible for marketing all bleached and unbleached kraft paper products produced by the Prince George pulp and paper mill’s operation in Prince George, British Columbia and CKPI’s unbleached kraft paper mill in The Pas, Manitoba. CKPI became the successor company to Tolko Marketing and Sales Ltd. on November 10, 2016.
Through a cooperative sales and marketing agreement called Fibre United, Canfor Pulp and Finnish-based UPM Pulp provide customers with a wide range of products in China, Japan, Europe and North America. In 2016, we announced that Fibre United would expand to Korea, the world’s fifth-largest pulp market.
Canfor and Canfor Pulp both work hard to gain a better understanding of our customers in markets around the globe. By understanding our customers’ needs, we contribute to their success.
For example, in September, our solid wood sales team met with some of our largest US customers at the third annual Customer Advisory Member Panel (CAMP) in Myrtle Beach, FL. We received positive comments on our supply chain and quality control processes, and also had valuable feedback on ways we can continue to improve our performance.
Additionally, Canfor Pulp technical services, innovation and sustainability staff contact customers directly through TEMAP, our technical marketing program. We use these customer interactions, presentations and seminars to learn more about customer needs so we can serve them better.
Canfor Pulp partners with internationally recognized experts to support our specialty paper applications and to deliver training on refiner fundamentals, and to support premium tissue customer optimization studies. Our extensive technical collaborations with equipment manufacturers and specialty paper producers have continued to support our growing expertise in helping our customers develop new and improved products. We provide secure product delivery by coordinating with transportation partners worldwide.