The inevitable consolidation of the wood processing industry
Québec, December 14, 2004
– The low capacity utilisation rate of the wood processing
industry, along with the anticipated decrease in maximum sustainable
yields and the resulting allocations, the precarious conditions
of the newsprint sector and fierce international competition
for standard softwood lumber products lead to believe that
the trend toward consolidation of the Québec industry
will accelerate in the coming years.
That is one of the main findings of the Commission
for the study of public forest management in Québec
that tabled its report today.
“Among Québec companies that
process wood fiber, there is a clear need for greater flexibility
so that they can adjust to changing economic conditions,”
stated one of the Commission members, Jean-Thomas Bernard.
“The advantage of being close to the American market
will always be there, but the government must definitely make
it easier when it comes to rationalization in the primary
processing industry.”
As a result, the Commission proposes that
the government seriously examine the possibility of eliminating
the mandatory link between the volumes of woods allocated
for harvest in public forests and a specific mill. This measure
seems to be unavoidable for mills so that they can improve
their performance and sharpen their competitive edge.
The Commission points out however that it
is also important to set guidelines to foresee and limit the
impact of such a rationalization and its implications in the
resource regions. In this regard, the government has a key
role to play in accompanying communities that must turn to
other source of economic development.
For that standpoint, the Commission recommends
that a government interdepartmental working group be set up.
This group, which would work under the umbrella of the implementation
committee, would undertake two main tasks. The first would
be to establish an effective decision-making process and identify
the conditions that would facilitate the rationalization of
operations and the consolidation of wood volumes in certain
mills. The second task would involve the implementation, in
conjunction with regional decision makers, of a strategy to
minimize the impact on jobs and on local communities, including
their level of services and rate of taxation.
“This consolidation should be seen
as an opportunity to look ahead and develop some of the forest’s
many facets that, until now, have not been fully explored.
All regional stakeholders are called upon to take a proactive
approach to this challenge,” pointed out Commission
member Jules Arsenault.
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