Wood products takes a hit

[Coon]

With Weyerhauser shutting down the pulp and paper mill in Prince Albert, Sask.  Many more jobs besides the 690 are at stake.  The local economy will hurt because of this.  Weyerhauser has the monopoly of the timber here in Canada and from my opinion are going about the forestry industry management practices in the wrong ways.  Just because the paper prices are down why shut the mills down.  As they have stated it is not the supply that is hurting it is the demand.  So why not just produce on a smaller scale??  why not go into a specialized paper production of some kind?  All in all we have to admit that Weyerhauser does not care about the unemployment of the people or the poverty of this province. 

[Frank_Pender]

Amen, Coon.  You right on the money.

[customsawyer]

It was just a few years ago when IP bought out Union Camp down here in the south and then it started to close alot of those mills down and the industry as a whole had to change its way of thinking in the south I don't want people to think that I feel it was IP fault as there were alot of other factors involved in the process but buy and large it seems to work out the people with grit will find a way to make a living and the people that were just riding on the coat tails of others will find another coat tail to ride.

[Frickman]

I tend to look at things in free-market, Austrian economics light, with supply and demand controlling the market. If these big companies want to sell off assets, bless their greedy little hearts. If there is a demand for some type of wood product, someone is going to find a way to economically fill the need. Any of us who are involved in the wood industry do that everyday, or we won't be in business much longer. The scaling back of these large companies is actually creating more opportunities for the smaller producers, which many of us here are.

There has been a trend taking place in business the last decade or two, mass customization. The company model of the 50's and 60's was a very bearaucratic, inflexible structure that was very good at producing mass quantities of a homogeneuos, standarized product. Now consumers are demanding mass produced products made to their unique specs. If you order a Dell computer, it is custom built for you to your specs and shipped in 24 hours. Dell does not keep an inventory of assembled computers, nor an inventory of components. They do not actually pay for a part until the computer is built, their suppliers carry the inventory cost.  This creates a very efficient process for producing a computer, helping to lower the price. What I see, and this is just my observation, is that many companies are unwilling or unable to change and adapt to this new "paradigm" if you will. These companies crumble under their own weight, allowing room for a smaller, more nimble organization to fulfill the demand.

My personal opinion is that over the years the variety of different paper and pulp products has exploded, and these large organizations were better suited for the days when there fewer types of paper manfactured. Now this is coming from a person who has never cut a pulp stick in his life, so take it for what it's worth. I just see the same trend going on in other industries.

If a plant is outdated and inefficient I can see shutting it down. But I can't see divesting of timberland just to make the balance sheet look good. Most wood consuming companies buy at least some material on the open market, but it's nice to have your own to get you through tough times. I guess this is what happens when you turn the day-to-day operation of a company over to MBA's seeking to please Wall Street the next quarter intead of managing for the long-term.

[Percy]

I tend to look at things in free-market, Austrian economics light, with supply and demand controlling the market. If these big companies want to sell off assets, bless their greedy little hearts. If there is a demand for some type of wood product, someone is going to find a way to economically fill the need. Any of us who are involved in the wood industry do that everyday, or we won't be in business much longer. The scaling back of these large companies is actually creating more opportunities for the smaller producers, which many of us here are.

There has been a trend taking place in business the last decade or two, mass customization. The company model of the 50's and 60's was a very bearaucratic, inflexible structure that was very good at producing mass quantities of a homogeneuos, standarized product. Now consumers are demanding mass produced products made to their unique specs. If you order a Dell computer, it is custom built for you to your specs and shipped in 24 hours. Dell does not keep an inventory of assembled computers, nor an inventory of components. They do not actually pay for a part until the computer is built, their suppliers carry the inventory cost.  This creates a very efficient process for producing a computer, helping to lower the price. What I see, and this is just my observation, is that many companies are unwilling or unable to change and adapt to this new "paradigm" if you will. These companies crumble under their own weight, allowing room for a smaller, more nimble organization to fulfill the demand.

My personal opinion is that over the years the variety of different paper and pulp products has exploded, and these large organizations were better suited for the days when there fewer types of paper manfactured. Now this is coming from a person who has never cut a pulp stick in his life, so take it for what it's worth. I just see the same trend going on in other industries.

If a plant is outdated and inefficient I can see shutting it down. But I can't see divesting of timberland just to make the balance sheet look good. Most wood consuming companies buy at least some material on the open market, but it's nice to have your own to get you through tough times. I guess this is what happens when you turn the day-to-day operation of a company over to MBA's seeking to please Wall Street the next quarter intead of managing for the long-term.

I like what you are saying...Globalization has caused corporations to go where "its cheapest" for the reasons you stated. Here in B.C. we have pulpmills/sawmills shutting down all over the place in the last 5 years and we are still using paper/wood products. Hmmmmm its commin from somwhere. That has hurt alot of towns/ regions such as Coons and mine. The flip side is smaller companies are springing up using the resource that the corporations hoarded previously. Case in point, since Skeena Cellulose shut down, I have been able to get logs about a hunnert times more easily than before. I know this doesnt help the displaced workers but this is a fact of life in these days of "globalization".  The only constant is change and trying to land on your feet. Tuff when you are 51 and a bit unsteady on your feet..

[Geoff]

There used to be a little grocery chain called Jewel-T.  They offered low prices via no-frills shopping.  Instead of placing items on the shelf, they'd just cut the box open and set the whole thing on there...stuff like that.  You had to bring your own container to ferry your stuff out to the car.  I don't know what ever happened to them.

Karl, I believe that everything on this earth has a purpose.  There seems to be a disproportinate number of things that are just put here to keep us humble.

Pretty Funny DanG!  Whats even funnier is that up here in Ontario Canada, we have a grocery store named No-Frills.  They keep a pile of boxes up front in a bin that the average cheap Joe like me can grab and use to tote their tissue paper, toilet paper and beans to the car.  If you want a bag (plastic), they charge about 5 cents.  It's a decent system actually.  Their prices and quality are amazing, and the selection is good.

Stupid me though, I always swear I'll remember to bring bags the next time....never do though.

G

[Coon]

Now for us in eastern Saskatchewan, we have to ship out all of our pulp logs to Swan River, Manitoba to the next closest pulp and paper mill.  That means that our local and provincial economies are going to suffer such a huge loss.  Manitoba's economy will now benefit greatly from us woodlot owners who have the wood material and resources to clean up our woodlots.  Many cords of pulp material is in its prime and needs harvested before the bugs move in.  Personally I have about 600 cords of white poplar that needs to go for pulp.  But if the price can not be justified with the truckin and fuel costs to ship it to Swan River, it will then have to be sawn into dimensional lumber.  I just do not have the necessary equipment to saw that high of footage.  The LT40HDG25 tha I own just isn't big enough.

[Minnesota_boy]

That Lt40 sure can saw up that much poplar, but it may take more than one year.   I can handle about 2 to 3 cords of it per day of sawing with the same size mill. 

[Coon]

Yes, it can.  But the biggest factor is the bugs that are already in it.  By next year the ltrees will be of lower grade.  The Swan River mill will take them this year but not next.  Another angle of the situation is that I have my yearly take of spruce to take thus not allowing me the time factor for the poplar.  By the time I would have gotten to the poplar the bugs will be in it to bad that it wouldn't make grade lumber.    KINDA stuck between a rock and a hard place here.

[Cedarman]

We try to be a little like Dell in that we do not saw any wood until we have an order.  Very seldom are 2 ordeers the same so we saw to suit each customer. We have a variety of equipment to do value added which gives us a leg up on other mills. Now if I could get the loggers to wait until we sawed the logs, we would be even more like Dell.  I am not holding my breath.

Now for the plastic grocery sacks.  I would love to see a tax on those ugly things made with a non renewable resource. 

Don't you just love the way they make good tree and bush ornaments along the sides of the highway?

Be back in about 2 weeks.  In so Ok grinding cedar to mulch.  So far this year it has gained on us about 200,000 acres.