West Fraser increased operating earnings in Q1 2018 by 44.8% YoY to $265 million, company reported. The sales have grown up 14.8% to $1,364 million.

The lumber segment generated operating earnings of $189 million (Q4-17 – $232 million) and Adjusted EBITDA of $282 million (Q4-17 – $258 million). According to company, Q1 2018’s results were unfavourably impacted by severe winter weather, significant transportation challenges and a full quarter of export duties. Both SPF and SYP production were higher than the prior quarter, but SPF production was slightly lower than the prior year.

The panels segment generated operating earnings in the quarter of $25 million (Q4-17 – $20 million) and Adjusted EBITDA of $28 million (Q4-1 7 – $24 million). The plywood market was strong throughout the quarter with pricing well ahead of 2017 levels. Plywood shipments were held back by transportation challenges as well.

The pulp & paper segment generated operating earnings of $58 million (Q4-17 – $48 million) and Adjusted EBITDA of $70 million (Q4-17- $60 million). The major factors contributing to the increase in operating earnings were – 2-higher Canadian dollar pulp prices and an increase in NBSK shipments offset by lower BCTMP shipments, again due to transportation headwinds.

“This was a challenging quarter operationally. Weather and transportation challenges were significant headwinds to production and shipments. I also want to congratulate Ray Ferris on taking on the role of President and Chief Operating Officer. I look forward to working even closer with Ray as we continue to build upon the great efforts of all our employees,” said Ted Seraphim, Chief Executive Officer.

The company will continue to focus on operational improvements which should contribute to growing production in lumber and MDF versus the prior year. In the first quarter, results were adversely affected by transportation service disruptions resulting in a substantial increase in finished good inventory levels. “We are uncertain when the backlog of shipments will be cleared and we will likely incur additional storage, freight and other distribution costs.

Our pulp mills do not have any scheduled major maintenance shutdowns during the balance of 2018,” company said in a statement.

During the first quarter of 2018 company incurred duty deposits of $34 million related to CVD and $11 million related to ADD. Company continues to recalculate the ADD rate for the current period of review using its reported results and the same calculation methodology as the U.S. Department of Commerce (“USDOC”). Based on its current data, company determined that the expected ADD rate will be substantially lower than the current ADD deposit rate and as such, company has recorded a long-term duty deposit receivable related to ADD for the difference.

During the quarter, the USDOC and U.S. International Trade Commission completed a preliminary investigation and assigned company’s jointly-owned newsprint mill a CVD rate of 6.53% and an ADD rate of 22.16%. This resulted in an expense of $2 million in the quarter for its pulp & paper segment.

Photo: Ray Ferris President and Chief Operating Officer West Fraser

Favorable export markets in 2017 formed a steady growing demand for the main wood based products in Russia, according to the report ‘Russian Forest Based Industries in 2017’. At the same time, the turn of the Russian economy from a recession to growth (GDP grew by 1.5%) led to a revival of demand for products aimed at the domestic market.

In 2017, Russia sharply increased the import of woodworking machines (+ 60.7%) after a decline in 2016 by 15.6%. This may indicate that the wood processing companies have adapted to the current exchange rate of the national currency. Investments in fixed assets in the production of paper and paper products increased by 33.3%, and in wood processing (excluding furniture production) – by 5.5%.

The process of changing the structure of exports from raw materials to wood processing products continues: in 2017, log exports from Russia decreased by 1.6% with an increase in lumber exports by 10.1%. The largest external consumer of Russian forest products is China. In 2017 the share of the country in the Russian exports of logs was 66%, in the exports of lumber – 55%, in the supply of pulp – 58%.

Overproduction in the Russian MDF market has led to an increase in exports of these products in 2017 by 36.1% compared to 2016 and almost 2-fold relative to the level in 2014.

Growth (+34.1%) of production of pellets in Russia in 2017 in the coming years will continue at a rapid pace, as both Russian and foreign companies are planning to launch new production facilities.

The increased attention of the state to the development of the forest based industries in 2017 and the beginning of a number of incentive measures for the development of wooden housing construction can contribute to the growth of demand for lumber in domestic market in the perspective of 3-5 years.

The development of Internet commerce in Russia weakly stimulates demand for cardboard packaging inside the country. The manufacturers of cardboard packaging in China win from the growth of Russian Internet trade. China accounts for 90% of goods purchased by Russians on the Internet.

CN Rail has announced it will buy 350 centrebeam lumber cars to serve growing demand from lumber producing customers across its North American network.

“We are investing to move the economy as we put the rolling stock, infrastructure and people in place to serve the growing needs of our valued customers,” said JJ Ruest, interim president and chief executive officer of CN. “These additional centrebeams, combined with our recently-announced acquisition of 350 additional box cars, give us the tools to put more capacity at the disposal of business partners such as West Fraser. CN needs to and will do better moving lumber to market.”

The new-build, 73-foot riserless centrebeams, with a maximum load capacity of 286,000 pounds, are expected to be delivered starting in September. CN is also looking at an option to purchase or lease an additional 300 cars. “West Fraser looks forward to continuing to work with partners who can provide an effective supply chain serving the solid U.S. housing market,” said Ted Seraphim, president and chief executive officer of West Fraser.

The new cars will be manufactured in Canada by National Steel Car Ltd. at its assembly plant in Hamilton, Ont.

“National Steel Car has been building new freight cars for CN since 1919 and we are honoured to have the opportunity to continue to support CN and the customers they serve throughout North America,” said Gregory J. Aziz, chairman and chief executive officer of National Steel Car Limited. “This order will result in the hiring of over 250 employees at our Hamilton assembly plant, which currently employs more than 1,500 people, and will provide extended benefits for Hamilton and the Canadian economy.”

Bob Bratina, Member of Parliament for Hamilton East – Stoney Creek, said: “CN’s investment in new cars to be built at National Steel Car’s Hamilton plant is huge for the city, but its impact ripples far beyond the Ontario steel and manufacturing economy. This is an investment in the Canadian economy and workers across the country.”

Said Hamilton Mayor Fred Eisenberger, “Hamiltonians are proud of the role CN plays in our community, and this announcement is another vote of confidence in Hamilton and our skilled workforce.”

As part of CN’s record $3.4 billion capital program in 2018, the company is investing in new trade-enabling infrastructure and equipment. In addition to rail cars, CN expects starting in June to take delivery of the first of 60 new GE locomotives due in service in 2018.

This spring, CN has started its largest-ever infrastructure investment program, which includes $400 million to build new track and yard capacity to handle increased traffic across CN’s Western Region, and to Chicago. The infrastructure program includes new siding and double track projects benefiting forest products, grain, intermodal, coal and potash business.

After adding hundreds of train conductors to the field so far this year, CN continues to hire with a particular focus on crews in Western Canada. Approximately 1,250 more train conductors will be in the field before the next winter, compared to the number of conductors available before last winter.

Renholmen has received an order for new green sorting line equipment for Hedlunds Timber in Furudal.

The family-owned sawmill in northern Dalarna already owned a green sorting line from Renholmen, built in the late 1970s and now, after long and faithful service, to be replaced by a more modern successor.

The delivery, which is almost completely new between saw and sticker-stacker, includes a slightly simplified buffer, single feeder, trimmer for bevel optimisation, sink bin with SoftBin (a more careful bin emptying function) and new underlying conveyor. A new control system is to be provided for the facility for optimum flow.

Renholmen are pleased to be entrusted once again after 40 years with delivering equipment for green sorting in Furudal.

Renholmen AB is one of Europe’s leading suppliers of lumber-handling equipment for sawmill and lumber-processing industry.

BioCarbon Engineering (BCE), a UK company with the ambition to plant 500 billion trees by 2060 through the use of drones, has received a funding boost of US$2.5 million. The seed investment comes from SYSTEMIQ, a purpose-driven investment and advisory firm that aims to tackle economic system failures, and Parrot, the leading European drone group.

Every year, 15 billion trees are destroyed from natural and anthropogenic causes. Despite US$50 billion a year spent on replanting, there remains an annual net loss of 6 billion trees. Governments have made commitments to restore 350 million hectares of degraded land—equivalent to an area the size of India, which could accommodate around 300 billion trees—by 2030.

Meeting this target with existing methods alone is impossible. Currently, ecosystem restoration is mostly done by direct hand-planting, which is accurate but extremely time consuming. Aerial planting via helicopters is effective over large areas but results in much lower survival rates. BioCarbon Engineering’s drone-enabled technology fills the gap, planting seeds with both speed and accuracy across diverse landscapes.

The BCE system uses satellite and drone-collected data to determine the best location to plant each tree. The planting drones fire a biodegradable seedpod into the ground with pressurized air at each predetermined position at 120 seedpods per minute. The seedpods are filled with a germinated seed, nutrients, and other vital components. These penetrate the earth, and, activated by moisture, grow into healthy trees.

Two operators equipped with 10 drones can plant 400,000 trees per day. Just 400 teams could plant 10 billion trees each year, with the capability to scale to tens of billions of trees annually. The fully automated and highly scalable BCE solution plants 150 times faster and 4-10 times cheaper than current methods. This technology provides a new tool enabling global enterprises and governments to meet their restoration commitments. BioCarbon Engineering’s technology also goes beyond trees to plant other flora native to an ecosystem.

BCE is in full commercial operations with the first paid project in May 2017 in Australia. They have executed nine projects in the UK, Australia, Myanmar, New Zealand, South Africa, and Morocco. Work in 2018 will expand to projects in the UAE, Canada, USA, Brazil, Peru, and Spain. Customers include private landholders, companies, nongovernmental organisations, and governments.

As rates of deforestation and land degradation continue to rise, a 2018 report from the World Resources Institute and the Nature Conservancy identified ecosystem restoration as a growing area of economic opportunity for businesses, and attractive for investors as well.

“As an investor, we see BioCarbon Engineering as an important contributor to new transformative technologies we need to restore remote ecosystems at a cost and speed that are far superior to current solutions,” said Morten Rosse, Partner at SYSTEMIQ. “More important, BioCarbon Engineering’s technology provides valuable information that can help change the way we look at landscape management. SYSTEMIQ is proud to be part of its mission to restore ecosystems across the world.”

“BCE is the originator and global leader in drone-based ecosystem restoration,” said Lauren Fletcher, Founder & CEO of BioCarbon Engineering. “This partnership with SYSTEMIQ and Parrot, along with our core technology and talented team, will enable us to build a great global enterprise.”

“BCE is a valuable component of the commercial drone industry both in terms of mission and technologies,” said Gilles Labossière, Executive VP & COO, Parrot. “Supporting such project through responsible financial investments and using our leading position to promote drone for good is very important to Parrot. BCE has made great progress since our initial funding in 2016 and we look forward to seeing them restore our ecosystems and take landscape management to the next level.”

About BioCarbon Engineering
The idea of BioCarbon Engineering was formed in 2009 by Lauren Fletcher while he was at COP15 in Copenhagen. He is driven by a genuine concern about the state of our world: degrading climate, loss of natural environments, significant biodiversity losses, and a potential for global scale human suffering. He believes that emerging and exponential technologies, when appropriately applied, can solve global scale problems in ways that we have never been able to do before. He formally established the company in 2013 and formed the founding team in 2014.

About Parrot
Founded in 1994 by Henri Seydoux, Parrot is the leading European company in the fast-growing drone industry. The world’s second biggest company in the consumer drone market, Parrot designs drones known for their high performance and ease of use. Parrot also offers business solutions, including drone software and services mainly focusing on three major verticals: agriculture; 3D mapping, surveying and Inspection; and public safety. It currently employs 600 people worldwide and makes the majority of its sales outside of France. Headquartered in Paris, Parrot is listed on Euronext Paris (FR0004038263 – PARRO). For more information, visit www.parrot.co