Millar Western Forest Products Ltd. A RESOURCEFUL COMPANY Application for a Commercial Timber Permit to Harvest in WO1 in 2017-18 MILLAR WESTERN FOREST PRODUCTS LTD. 1
Company Overview Privately held business with more than 100 years of history and experience Largest Alberta-based forest products company Producer of lumber, pulp and bioenergy Conduct our business in accordance with our values of safety, integrity, honesty, trust and respect Full-time workforce of 550 skilled employees; hundreds more employed on contract basis in areas including harvesting, hauling and reforestation Family-oriented culture that encourages innovation, respect and collaboration Strong commitment to investing in our people, forests, facilities and communities 2
Millar Western s Economic Impact MNP conducted Economic Impact Study for Millar Western, using 2016 data: Millar Western generated $931 million in economic output, 73% of which was generated in Alberta Millar Western spent $345 million on fibre, labour, taxes, levies, goods and services, 75% of which stayed in Alberta MILLAR WESTERN 2016 EXPENDITURES, BY CATEGORY $345 million MILLAR WESTERN FOREST PRODUCTS LTD. A Resourceful Company 3
White vs. Green Areas Province is divided into 2 areas: Green or forested area (58% of land base) is managed for timber production, conservation, recreation, energy development and other uses, including grazing White or settled area (42% of land base) is 75% privately owned; the remaining public land is managed for agriculture, recreation, conservation. Forested public land in the White Area may also be managed for timber on a sustainable basis. 4
Proposed Operations in W01 Commercial Timber Permits (CTPs) are timber dispositions issued by the Alberta government, authorizing the harvest of Crown timber Millar Western is applying for a CTP to harvest 120,000 m 3 of aspen and 80,000 m 3 of conifer in W01, south of Whitecourt and north of Chip Lake Harvesting would occur between November 2017 and March 2018 Proposed harvest areas are in the following compartments: Groat Creek Hard Luck Creek Chip Lake Logs will be transported from these compartments along Hwys. 32 and 751, to Millar Western s manufacturing operations in Whitecourt 5
Proposed Harvest Locations 6
Reasons for Seeking a CTP Fibre is our most important input: secure access to timber is essential to our long-term viability Timber supplies in west-central Alberta are under increasing pressure due to factors such as caribou recovery planning Ability to make up fibre reductions on the open market is limited Millar Western is looking at new ways to maximize use of under-utilized fibre, such as: developing products using smaller logs (<10 cm top) testing the feasibility of aspen lumber production New product development is a multi-year process If granted, a CTP will offset some of the fibre losses arising from government land-use initiatives White Area timber supplies will help Millar Western maintain current production and employment levels as we adapt to changes in our fibre supply and pursue new product opportunities 7
Commitment to Sustainability If Millar Western is awarded a CTP, it will manage harvested areas in a sustainable manner, in compliance with the Alberta Operating Ground Rules: Develop annual operating plans, with input of nearby communities, other stakeholders and indigenous communities Accommodate government and local values such as aesthetics, recreation and biodiversity Restore harvested areas through a combination of tree planting and natural regeneration, and tend the young stands until they are established as healthy forest 8
Commitment to Stakeholder Outreach Millar Western has launched a consultation program to share plans, gather input and address community concerns Opportunities for providing feedback include: Open houses, advertised in local and social media Meetings with towns, counties and other interested stakeholders Distribution of information packages to landowners adjacent to harvesting areas and other forest users, including industry, grazing lease holders, trappers and recreational groups Presentation to the Millar Western Public Advisory Committee 24/7 virtual open house, at www.millarwestern.com/whitezone 9
Benefits of an Actively Managed Forests Active management helps improve forest health and reduce the forest s susceptibility to wildfire, disease and insect infestations, which are increasing in frequency and intensity under climate change. By converting renewable resources into valuable products, we create jobs and economic prosperity for Albertans. Old forests emit carbon as they decay, while new, young forests store carbon as they grow, helping to mitigate climate change impacts. In taking an ecosystem based approach, we can manage for wildlife, watersheds and other values important to Albertans, to ensure forests are able to support a diverse array of plants and animals. 10
Summary Millar Western is applying to the Alberta government for a short-term CTP to harvest on public land in the White Area, between Whitecourt and Chip Lake Aim is to secure sufficient fibre to help offset conifer shortages arising from government initiatives and allow development of new products, such as aspen lumber Millar Western will practice sustainable forest management in compliance with all regulatory requirements and/or higher level government plans (e.g. Agriculture Development Plan) Active forest management can help reduce wildfire risks and improve overall ecosystem health, to the benefit of all forest users Millar Western is seeking stakeholder input into proposed plans, to understand and address potential concerns If granted, the CTP will help to address fibre shortfalls and avert job losses and other negative impacts to the regional economy 11
Contact Us David Wall Director, Fibre Resources Office: 780-486-8263 Cell: 780-689-8280 Email: dwall@millarwestern.com Bob Mason Chief Forester Office: 780-486-8241 Cell: 780-689-7116 Email: bmason@millarwestern.com 12