2 questions about Wood Industry Business Management in Canada B.C

GastonRenaissanceWOOD3652020.pdf

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WOOD 365

Gaston January 2020 1

BC Forest Products Industry: a Renaissance?

WOOD 465

January 2020

Chris Gaston, PhD

2Chris Gaston January 2020

Overview

• Canadian fibre supply – land base, production and trade

• End-use markets – Lumber, wood based panels and engineered wood

products / composites • Residential, R&R, non-residential and industrial

– Bio-energy and bio-chemicals

• The renaissance of our industry! – Product and system evolution / revolution

• The Green Economy (?)

• Social change (?)

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Objectives…

By the end of this presentation you should be able to describe:

– The trends in “commodity” versus “value added” forest products

– The advantages of engineered wood products / systems

– The concept of the “three-legged-stool”; economic, environmental and social objectives of the forest industry

– The concept of “bio-pathways”

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Overview of the Canadian forest sector

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Forests of Canada

• 396.4 M hectares – 166.2 M certified

– 37.3 M national parks

• 2017 (hectares): – 0.78 M harvest (153 M m3)

– 15.5 M lost to insects

– 3.4 M lost to fires

• 67% coniferous, 16% mixed wood and 11% hardwood

• 94% publicly owned

• 30% of the world’s boreal forest

Source: The State of Canada’s Forests, 2016 Annual Report

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Forests of Canada

Source: BC Archives

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Forest industry in Canada—key facts

• Forest Sector Revenues (2014) – Forestry and logging $ 9.3 Billion

– Pulp & paper $24.5

– Wood products $26.5

$60.3

• Contribution to GDP (2017): $24.6 Billion

• Balance of Trade (2017): $24 Billion

• Average Wage per Employee (2011): $52,673

– 16% above the national average

• Jobs (2017): 317,320

• Research and development (2011) – Wood Products Manufacturing: $95 Million

– Pulp and Paper: $56

– Forestry and Logging: $ 6

Source: FPAC; The State of Canada’s Forests, 2016 Annual Report

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Structural changes in (or affecting) supply

• US housing collapse

• Drop in newsprint consumption

• Rise in lower grade demand (China, bioenergy)

• Rise in CDN $ value against US currency

• Annual allowable cut drops – Recently Ontario and Quebec; pending in BC with the MPB)

• Increasing fiber costs

• Decreasing fiber quality

• Increasing natural

disturbances

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Wood supply cost in Canada

Source: Wood Resources International, February 2007

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Global fibre supply changes

Source: Pöyry

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Canada forest products exports

Source: Industry Canada

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

Bi lli

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f C an

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Canada Exports of Wood Products + Pulp and Paper

SW Logs SW Lumber PB/OSB/Plywood

WCS and Builders Joinery Wood Furniture Other

Pulp Paper

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BC / rest of Canada lumber production

Source: Statistics Canada

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Canada lumber exports

Source: Industry Canada

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

Bi lli

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f C an

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ol la

Canada Exports of Softwood Lumber

United States China Japan EU 27 Others

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Canada lumber exports

Source: Global Trade Atlas

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Some context: wood-use in the U.S.

Source: RISI, Boston, Massachusetts

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U.S. housing starts

Source: US Bureau of the Census

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‘Stick-built’ platform frame construction

The average cost of rough framing, sheathing, soffit, and door / window installation is as low as $8 per sq. ft. ($16,000 for a 2,000 sq. ft. home)

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‘Pre-fab’ platform frame construction

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Move to 6-story multi-family

Source: WoodWorks

Library Square, Kamloops, BC, 2010

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Move to 6-story multi-family

Source: FPInnovations

Testing of 6-storey 2x4 construction in Japan

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Source: Adera, Vancouver, BC

Residential, University of BC

Move to 6-story multi-family

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Six story hybrid wood-concrete

Source: FPI, Quebec

Quebec, QC 2010

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Six story hybrid wood-concrete

Source: FPI, Quebec

Concrete cores/walls to resist lateral loads

Glulam post & beam

+ Three levels of parking (concrete)

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Five story hybrid wood-concrete

Source: Perkins + Will

Earth Sciences Building, UBC

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Five story hybrid wood-concrete

Source: Perkins + Will

Earth Sciences Building, UBC

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Consumer reaction to Canadian softwoods

Source: FPInnovations

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Cross laminated timber

Source: FPInnovations

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Kobe-level seismic test

Source: FPInnovations

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‘Tall Buildings’

Source: Michael Green Architecture

Wood Innovation Design Centre, Prince George, BC

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‘Tall buildings’

Source: Michael Green Architecture

“We are in a unique moment in architectural and building engineering history when shifting world needs has asked us to question some of the fundamentals of how we have built for the last century and how we will build in the next.”

Michael Green

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‘Tall buildings’

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Tall wood structures

Source: https://www.naturallywood.com

UBC Brock Commons

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Tall wood structures

UBC Brock Commons

Source: https://www.naturallywood.com

Promotion video

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Eight-story condominium—Portland, Oregon

“ …made with mass timber that accounts for 223 metric tons of avoided carbon dioxide emissions, while also storing 577 metric tons of C02 in the wood itself. That’s the equivalent to taking 169 cars off the road for one year."

Source:

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“It took 12,000 trees to make the manufactured structural elements for the building.”

Source: https://www. wpxi.com/news/tallest-timber-building-in-the-world-nears-completion/828246795

18-story high-rise—Norway

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“The state legislature earlier this year called on the Washington State Building Code Council adopt rules for CLT use when building residential and commercial buildings. The move represents ongoing efforts to bring CLT into mainstream use for residential and commercial construction, which would create commercial value for the small-diameter trees that are contributing to poor forestland health in Washington state.

It’s value was recognized by the state Department of Natural Resources in its 20-year forest health plan as a way to minimize project costs”.

Source: TJ Martinell, July 2018

CLT as forest-management strategy

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Tokyo 70-story building announced!

Sumitomo Forestry (90% wood, 10% steel)

Source: https://archinect.com/news/article/150050204/70-story-wooden-skyscraper-proposed-for- tokyo-could-become-world-s-tallest

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Wood pellets

Source: www.pellet.org

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Bio-pathways

Source: http://fpac.ca/

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Bio-pathways

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Source: FPInnovations

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Industry transformation

Forest Industry Transformation (IFIT) program provides significant industry support to help with the “valley of death”.

Source: http://cfs-scf.nrcan-rncan.gc.ca/selective-cuttings/51

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Life cycle assessments

Source: Athena Sustainable Materials Institute

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Examples of new tech / product development

• Past – Heavy focus on commodities

– Heavy focus on manufacturing cost reductions

– More limited: • Wood modification

• Engineered wood products

• Present / future – Growing interest in engineered wood products

and systems • Solid and Composites

– Bio-energy

– Bio-chemicals

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Glulam

Source: Chantiers Chibougamau

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Glulam

Source: Nordic, Structurlam, Western Archrib

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Laminated Veneer Lumber (LVL)

Source: FPInnovations

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Laminated Veneer Lumber (LVL)

Source: FPInnovations, Quebec City office/laboratory

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Parallel and laminated strand lumber (PSL. LSL)

Source: FPInnovations, Weyerhaeuser

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Cross laminated timber

Source: FPInnovations

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Treated lumber

Source: US Borax

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Source: ThermoWood

Economic, environmental and social

Thermally modified wood

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Wood-plastic composites

Source: Trex

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Plastic-wood composites

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Chemically modified (acetylated) wood

Source: Accsys Technologies

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Pulp-based hybrids

Source: https://www.dascanova.com/en/Home.html

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Light weight panels / partition walls

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Wood fibre insulation

Source: http://www.gutex.de/en/Products/Installation_and_Product_Information/#

Steico, Actis, Pavatex, Gutex and others

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Bio-plastics

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Biodiesel

Rudolf Diesel

Rudolf Diesel's designed his demonstrated engine in Germany in 1893 running on nothing but peanut oil.

Linoleum

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Biodiesel

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Biochemicals / bioproducts

Source: FPInnovations

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Star Trek replicator

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3-D printing

Source: http://www.technewsworld.com/story/83035.html

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3-D printing

Source: http://www.collective-evolution.com/2014/02/22/scientists-develop-giant-3d-printer- that-can-build-a-house-in-24-hours/

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4-D printing…. the addition of time

Source: http://www.smithsonianmag.com/innovation/

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The 4th industrial revolution!

Source: https://www.simfactory.io/news/what-is-industry-4-0-and-how-did-we-get-here/

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The ultimate goal

Transportation Fuels

Other Fuels and Products

Chemicals, Plastics, Rubber

Petroleum End-uses

70%

26%

Revenues

43%

42%

15%

Source: T. Werpy, 2009 BioWorld Conference (Modified by Tom Brown)

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Economic, environmental and social

Opening Doors!

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Questions?

Chris Gaston

[email protected]

+1 604 827 1417

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Quiz

• Define the main difference between a “commodity” versus a “value-added” forest product

• Of these two, which dominates Canadian exports?

• What are the three measures used in defining “bio-pathways”