Message from CEO Don Kayne

This is Canfor Corporation’s 16th sustainability report; the fourth combined report with Canfor Pulp Products Inc.

Each highlights the innovative changes we are making to our forest management, our manufacturing processes, our products and our markets – changes that enable us to draw even more environmental benefits from our natural, renewable forest products.

This report is no exception. It shows our leadership in supporting new products and processes. Canfor Pulp has signed an agreement with Licella Fibre Fuels of Australia to determine whether we can economically convert wood biomass and pulp mill residue streams into a stable biocrude oil. Canfor 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.
It shows how we are making use of advanced technology – such as drones and LiDAR remote sensing – to improve our environmental performance in the forest. We use drones to help us identify preferred forest road locations in difficult terrain and to map wood residue accumulations at our sawmill sites. We use LiDAR to obtain more precise and reliable information about the forests we manage, improve our environmental assessment process, and enhance our ability to provide product profiles for customers.

Throughout the report, there are examples of how Canfor and Canfor Pulp are making our products more sustainable by improving our manufacturing processes, regenerating forests, reducing greenhouse gas emissions, and increasing the use of biomass for power and heating. It shows how we are making our operations safer and more efficient, and how we support the communities where we operate. 

In 2016, we planted 72 million trees on our tenures in Alberta and British Columbia. We worked with Ducks Unlimited Canada and sector partners to advance sustainable forestry management and wetland conservation in Canada’s boreal forest. We led the development of a migratory bird management tool -- in partnership with other licensees -- to help protect populations of migratory birds in BC’s interior.

Our employees are committed to continuous improvement and operational excellence. When the BC Ministry of Environment released its first-ever Compliance Inspections Report in 2016, Canfor Pulp’s environmental performance was outstanding. An audit of a Tree Farm Licence in southeast BC by the province’s independent Forest Practices Board found that our operational planning, timber harvesting, road construction and maintenance, silviculture and fire protection met regulatory requirements in all significant respects. 

Canfor is one of the few primary lumber manufacturers to offer products certified to all of the independent certification programs in North America – 99.5% of our woodlands operations and managed tenures are certified to internationally recognized standards. All of our Canadian and most of our US facilities are chain-of-custody certified – and we will pursue certification in our remaining US mills in 2017. In 2016, 83% of Canfor Pulp’s fibre supply was from certified sources, and all of it comes from BC where it meets stringent provincial forest laws.

Canfor and Canfor Pulp work closely with First Nations communities to open up training, employment and business opportunities, and to ensure we manage forests in a way that respects their traditions and values. And we welcome the involvement of a wide range of stakeholders to discuss current practices, review our sustainable forest management plans, and monitor key indicators.

As an integrated forest company, we are able to make the best use of every tree we harvest – for lumber, pulp and paper, pellets and green energy. In 2016, we expanded our mix of premium products when we acquired Wynndel Box and Lumber. Located in a region of southern British Columbia with exceptionally high-quality fibre, the company manufactures specialty products such as premium fascia and fencing.

We completed the third phase of an agreement to purchase the lumber business of Scotch & Gulf Lumber, LLC, in Alabama in 2016, and will complete the acquisition of Beadles and Balfour Lumber Companies in Georgia in early 2017. Our significant growth in the southern United States led us to open headquarters for Canfor Southern Pine in Mobile, AL, in October 2016.

We sell our products to markets around the world, including China where there is demand for higher-value products. In 2016, we shipped lumber to Indonesia for the first time, and confirmed an order in Malaysia. Fibre United, a cooperative sales and marketing agreement between Canfor Pulp and UPM Pulp, expanded to Korea, the world’s fifth-largest pulp market.  

I am especially pleased to report that we once again had an impressive safety record across all our operations. Our company-wide medical incident report (MIR) of 1.90 was the lowest we have ever achieved – and our solid wood operations in Canada and the United States also set single-year records. Canfor Pulp, at 2.29, registered its best three-year average. 

And we continue to be recognized as one of BC's top employers for 2016, primarily for our efforts in encouraging employees to balance work and personal life and helping them plan for life after retirement. Our goal is to have a diverse, inclusive organization, and in 2016, our executive backed this by signing a diversity leadership commitment. We encourage managers to consider diversity in their recruiting and promotion decisions, and participated in activities to promote diversity in our workplace. 

The potential ahead for our industry has never been greater. Our renewable products fit perfectly with global goals to lower environmental impacts. Today ground-breaking research is opening more doors – wood is being used in a broader range of construction applications, pellets offer a clean, natural bioenergy source, and wood fibre is being used in textiles and bio-plastics.

Don Kayne
Chief Executive Officer, Canfor Corporation and Canfor Pulp