By Tom Sundher
Like our world-class lumber, the B.C. forest industry is resilient. Whether it’s commodity cycles or insect infestations, our industry is accustomed to facing challenges and bouncing back.
Consider that, in 2013, just several years after the global financial crisis decimated the U.S. housing market and the pine beetle epidemic downsized the sector, our industry still supported about one out of every 16 jobs in BC and generated $15.7 billion in revenue, or roughly 2.5 per cent of provincial GDP.
Sundher Group, one of more than 1,500 secondary forest product manufacturers operating in B.C., had $25 million in sales last year and cut 90,000, cubic meters of logs – up 10 per cent in volume from the year before.
However, our industry is currently facing another set of challenges: uncertainty around the Canada-U.S. Softwood Lumber Agreement, which formally expired in October 2015; lack of investment in our infrastructure, in particular saw and pulp mills; as well as securing additional timber supply for local sawmills.
While the B.C. economy was built on lumber, and the forest industry is deeply woven into the social fabric of communities across the province, issues facing the sector today are increasingly global – but so, too, are the solutions.
Access to foreign markets with significant growth potential will be essential to diversifying our industry’s client base, stimulating new investment, and securing additional timber supply for the local sawmills.
Pivotal to this opportunity is our region’s robust trade network, which enables us to keep costs down and capitalize on B.C.’s proximity to strategic markets in the Asia Pacific region. That includes Port Metro Vancouver, Canada’s largest port, which exported more than 23 million metric tonnes of forest products last year and is critical to the operations of numerous forest industry companies.
As an integral component of the Asia-Pacific Gateway, Port Metro Vancouver links the local business community with expanding opportunities abroad. Sundher Group, for instance, will be shipping 60 per cent of its products this year via the port to foreign markets, including Japan, China and India.
India, which has traditionally utilized hardwood species of lumber such as teak, is an example of a market with high-growth potential for Sundher Group and the broader industry.
Working alongside Forestry Innovation Investment (FII), we have cultivated ties with the India market by working to lift restrictions on B.C. wood species, as well as educating end users in India on the specifications and usages of Canadian lumber. This approach has enabled us to expand our business in the India market 10 fold between 2012 and 2015.
So as forces beyond our control again challenge our industry, we need to identify new opportunities.
That means educating foreign buyers about the benefits of BC lumber, and collaborating with industry partners, such as FII, to jointly develop new markets. It also means leveraging the strength of critical trade infrastructure, anchored by Port Metro Vancouver, in diversifying lumber export markets.
While global trends can close doors, they also open windows. Our industry is resilient and innovative, which is why I’m confident we will use this shift in the landscape to our advantage, emerging in a stronger position than before.
Tom Sundher is the President, Sundher Group of Companies writing special to Business in Surrey Newspaper.