2017 International Softwood Conference Hamburg, Germany. Don Kayne, President and CEO Canfor Corporation

Transcription

1 2017 International Softwood Conference Hamburg, Germany Don Kayne, President and CEO Canfor Corporation 1

2 About Canfor 2

3 Solid Wood Residuals THREE KEY BUSINESS STREAMS SOLID WOOD PULP & PAPER ENERGY/RENEWABLE SPF / SYP Douglas Fir/Larch NBSK Kraft Paper BCTMP Green Electricity BIO Fuels Pellets 3

4 Our Operations 24 Sawmills 13 in Canada 11 in US 1 Finger Joint Plant 2 Engineered Product Mills 1 Green Energy Plant 3 Pellet Plants 4 Pulp Mills / 1 Kraft Paper Mill (integrated) 4

5 Volume (Million m³) Growth in Lumber Production 9,5 9,0 8,5 8,0 7,5 7,0 6,5 6,0 5,5 5,0 4,5 4,0 3,5 3,0 2,5 2,0 Spruce-Pine-Fir Southern Pine Proj. 5

6 Canada - World s Tallest Mass Timber Building 18-Storey Student Residence Building Vancouver, BC (UBC) 4 months ahead of schedule Hybrid system CLT floor, glulam columns, steel connectors & concrete cores Time to complete 9 1/2 weeks and 18% faster than a concrete building 6 Source: Wood Works BC

7 7 Key Global Markets

8 CHINA Green Building Urbanization Growing Middle Class GDP Growth 8

9 One Belt, One Road China Modern-Day Silk Road Infrastructure project connecting China overland to Europe, and by cargo ships to Asia and Africa Involves 65 countries, 4.4 billion people and representing 30% of the global economy Accelerate economic growth in surrounding countries as a path out of poverty 9 Source: CNBC, Mercator Institute of China Studies

10 China Special Economic Zones Since the 1980s, special economic zones (SEZ) played an instrumental role in the integration of China to the global economy and in its economic development $45.45 billion for manufacturing and industrial park projects to support its efforts to integrate Beijing, Tianjin and Hebei province into a megacity Special economic clusters which led to construction of modern port terminals to support an exportoriented strategy 10 Source: China Briefing, Nextbigfuture.com, Hofstra.edu

11 China Wood Use Moving Up In Value, and Increased Diversity Of End Use Applications Hybrid Building Furniture Components Wood Construction Door Core Furring Strips Concrete Forming Lumber Consumption 11

12 Volume (Million m³) Next China is CHINA! Canadian Softwood Lumber Shipments to China 6,0 5,0 Forecast 4,0 3,0 2,0 1,0 0, Source: COFI. Canfor

13 JAPAN Declining Population Hybrid Construction Growth In Mid-Rise Growth In Non-Residential 13

14 Japan Softwood Lumber Demand in Transition The falling working-age population will result in smaller labour force and drive further automation in the housing market Growth in non-residential and mid-rise will increase wood use outside of typical housing segment 23% 2x4 Construction 74% Post & Beam 3% Pre-Fab Panelization Pre-Cut Pre-Fab 14 Source: Ministry of Land, Infrastructure, Transport and Tourism

15 INDIA Economic Growth Population Demographics Green Building

16 India Increase softwood lumber imports for interior decorative panels, wood frame homes, and furniture/door manufacturing 1,000 m³ Monthly Softwood Imports From Europe & North America Furniture Components Wooden Doors Interior Wall Panels Wood frame Homes 16 Source: Woodstat, BCFII

17 Per Capita (m³ per Person) per capita per capita Volume (Million m³) Opportunities - Softwood Lumber Consumption Per Capita Consumption per capita (m³ per person) 0,40 0,35 0,30 0,25 0,20 0,15 0,10 0,05 0,00 0,35 0, ,15 0, ,03 Canada United States Europe Japan China India 2,3 0, Source: Canfor

18 U.S. and Canada Softwood Lumber Trade Dispute Timeline for the Softwood Lumber Agreement (SLA) Trade Dispute I Trade Dispute II Trade Dispute III Trade Dispute IV Trade Dispute V (1982) ( ) ( & ) ( ) (?) (2017 status of current litigation) Preliminary Countervailing Duties (19.88%) May 1 to August 25 Preliminary Anti-dumping Duties (6.87%) June 26 to December 30 Renewed Agreement 18 Source: Canada Export Development Canada, U.S. Department of Commerce

19 Lumber Price (US$/Mfbm) Western S-P-F Lumber Price Forecast (US$/Mfbm) $460 $440 $420 $400 $380 $360 $340 $320 $300 $280 $260 $380 YTD Average $305 $ US$420 - US$430/M Source: Random Lengths Publication Inc., Canfor

20 Summary Strong demand in Asian and North American markets over the next few years Demand shifts to more hybrid construction and building automation in all markets Governments will increase focus on green building initiatives around the world Industry must build a first-class supply chain, critical in connecting the world U.S. and Canada softwood dispute will be resolved, but when? Expect lumber prices to be volatile, but trend higher through the end of the decade 20

21 21 Thank you