WHENEVER talk in B.C. turns to exporting wood, most people think it’s to Asian markets.
Not so much at Skeena Sawmills.
It’s now shipping product to the Alberta oilsands as another indication of the widespread impact Canadian energy development has on the overall economy.
Skeena Sawmills, now owned by Chinese interests which purchased it from former owner West Fraser, has hired an additional set of workers to produce wood products bound for Alberta.
It’s not a full second shift because the product bound for Alberta does not need to be planed or dried as is the case for wood going to other markets.
“They are buying the kind of products made from hemlock all the time,” says Skeena Sawmills vice president Roger Keery of its Alberta customers.
The sawmill’s marketing company Trans Pacific Trading (TRAPA), which is part of the Hampton group that owns the mill in Burns Lake, asked if Skeena could cut the wood here for use by the oilsands, he said.
“The early indication is Alberta has had a really good market reaction to our product,” said Keery.
Alberta oilsands companies use the wood from here, hemlock, for rig mats and pipe blocking.
Rig mats are wooden sections laid down like a road or bridge so equipment can be driven over them out onto soft ground.
Pipe blocking means the wood is put down so pipes can be stacked on top of it.
Companies in Alberta now send Skeena Sawmills a list of what they want and Keery anticipates signing longer term supply contracts in the next few months as Skeena Sawmills establishes itself as a reliable source.
“And we’d like to persuade Chevron when they start building the LNG line, they will need that [hemlock] too, and we’ll be in a good position to provide it,” he added of the Pacific Trails Pipeline that would carry natural gas through a connection near Prince George to a planned liquefied natural gas plant at Kitimat.
Roc Holdings Ltd., with the backing of Chinese entrepreneurs, first bought Skeena Sawmills from West Fraser in mid July 2011 and re-opened it fully in late 2012.
The mill was closed because of a labour dispute and lock out in 2007 and when that dispute ended, West Fraser did chip wood on occasion but kept it mostly on a maintenance-only schedule until finally deciding to sell the facility.
For its first year back in business, Roc Holdings Ltd. Focused on selling dried and planed wood bound for the Japanese market.
“The market over there is in the tank right now,” said Keery.
Along with developing the Alberta market, Skeena Sawmills is now selling to China, said Keery.
“I think it’s going to be a real positive change for the business,” he said of the Alberta and Chinese markets.
Long term, Keery continued, is to bring the mill up to two full shifts.
The sawmill needs to run more than one shift to make the business successful so the long-term intent is a new plant in the next five years, said Keery.
“This mill is very old and not efficient so we need to do something about that,” he said, adding that first it’s important to understand what products they need to make and what customers they’re servicing.
The timber supply in this area is a challenge as hemlock is a difficult species and has a higher pulpwood content than in other areas, said Keery. Rocky, steep country also increases logging costs.
“That’s a major issue here with sawmilling, said Keery of wood quality and costs.
“It’s like trying to farm in the Yukon,” he added.