Forest industry economists have been saying for years that when raw logs from B.C. are . sold to foreign buyers, manu- facturing jobs and economic benefits goacross the ocean with them. The business of exporting logs isn’t popular, and when Westar recently announced the intent to curtail or shut down operations at its Kitwanga saw- mill with the claim that exports had cut off its timber supply, the ‘business became even less popular. by Michael Kelly The Minister of Forests and the companies that are cutting the logs have a different tale to tell, however. They say if it - weren’t for the high prices logs bring on the export market, the ‘North Kalum. forest area couldn’t be logged at all. . _ In an interview after Westar announced that they can’t com- pete with foreign log buyers’ prices, former Forests Minister Dave Parker pointed out that prior to 1984, Westar had the entire North Kalum sewn up in its tenure as the holder of Tree Farm License #1. In 1984, _ Parker said, the company went to the Minister of Forests at the time, Tom Waterland, and ask- ed to be relieved of the tenure for the North Kalum area, say- ing it would be uneconomical to log it. The request was granted, and the area was offered as a 20-year renewable forest license. The ministry got three viable proposals to log it, and the area was split into three licenses. Tay-_ M Logging of Terrace and Oren- da and Buffalo Head of Stewart each got volume-based tenures in North Kalum, with reviews scheduled at five-year intervals. What the ministry saw in the North Kalum, Parker said, were a lot of good forest growing sites occupied by a lot of decadent and marginal timber. Along with the awarding of the three licenses, an Order in Council was issued in 1985 for a total- volume standing green export permit in the North Kalum Timber Supply Area. Everything that was cut there was eligible for raw log export sales. The idea, Parker explained, was to clear the sites for replanting; the three licensees were given the ex- port rights to make the logging economically viable, and they were expected to replant harvested areas to create a com- mercial second-growth situation — in the area as soon as possible. ‘There was very little interest in the area at the time,’ Parker - said, ‘‘The purpose was to assist salvage and site rehabilitation. They (the licensees) took out a lot of insect-killed timbér, cre- ated jobs in Stewart, and under- took an obligation to forest renewal. As far as I know, they're meeting their commit- ments.” With regard to calls for the ex- port permits to be revoked, Parker said the policy comes up for review in 1990 and he has no intention of acting before that. A week after the interview, Parker was moved out of the forests portfolio in a cabinet shuffle and replaced by Claude ‘away,’ he said. Richmond. The annual cut in the North Kalum is over one million cubic meters; it’s divided about equal- -ly among the three’ major licenses, with Small Business — Enterprise Program loggers cut- 7m ting about 200,000 cubic Tmeters ja per year, “They’re all. market loggers, - : none: of them have conversion plants (mills),’? Parker said. “They're selling the product — 3m as I assume Westar does — for | - the.best return they can. get.” Exporting to survive “*If there were no log exports, we wouldn’t be in business,” Tay-M’s Robert Yorke said in a recent interview. The Ter- race company has a volume- based license to cut in the -Meziadin Lake area amounting to about 280,000 cubic meters annually. Yorke estimates the mix at half sawlogs and half pulp. He takes issue with Westar’s contention that the contemplated sawmill produc- tion cutback in Kitwanga is related to log prices. **They said a couple of years ago that Carnaby (the new high- tech mill near Hazelton) was designed to replace both Rim (in Hazelton) and Kitwanga,’’ Yorke said. He also noted the expense of getting wood out of the forest and into a shipping position for export: $52 per cubic meter from stump to tide- water. Yorke said he intended to enter a submission to the Select Standing Committee on Forests and Lands at hearings in Prince Rupert and Stewart last week, including confidential financial statements that he believes will convince them the export market is necessary for his company’s survival. Buffalo Head is based in ‘Stewart and has a license to cut 360,000 cubic meters per year. Ross Adam, one of the com- pany’s owners, said last week they’re logging in a mix of 85 percent pulpwood and 15 per- cent sawlogs. Buffalo Head ex- ports about 54,000 cubic meters of sawlogs, he said, half to Japanese buyers and half to Koreans. Westar, he claimed, isn’t interested in the Korea- bound logs because they’re too low in quality, and for the high- quality Japanese. logs they of- fered only half of what the Japanese bid. Adam said Westar hasn’t even contacted him in the past year. He also challenged Westar’s contention, quoted in the Ter- race Review three weeks ago, that sawlogs are being sold for up to $150 per cubic meter. Log sales to the Japanese, he said, average $60-70. Adam said his company is just starting to make money because the price of pulp logs is strengthening; if the export per- mit is cancelled, Buffalo Head will be back in the red. The com- pany has 110 direct employees, and Adam said they’ve put $50 million into the Stewart economy over the past four years. ‘Westar had it and threw it “We're just starting to make a living here.” Both the ex-Minister of Forests and logging companies holding licenses in the North Kalum argue that the high prices brought in by the export log market are essential to make logging in the area viable. . File photo. Regional district calls for partial export restrictions The Regional ' District of Kitimat-Stikine board of direc- tors has gone on record in op- position to log export permits for Small Business. Enterprise. Program operators in’ the’ region, but only after con- siderable discussion. At the board’s October meet- ‘ing a motion was put forward to request a report from ad- ministration on details of the log exporting situation in the North Kalum Forest District and wait until the November meeting to make a decision, but after a Committee of the Whole meet- ing the previous evening with Tepresentatives of Westar Timber, several directors felt the issue was too pressing to allow delay. In debating the form of the final motion, directors Bev Rodrigo and Harry Nyce both pointed out that the three major license holders in the North Kalum were not at the meeting to express their views. Stewart director Andy Burton also noted that log exporting and the logg- ing and trucking activity it sup- ports are vital to his community’s economy. The successful motion, put forward by Burton, called for the Ministry of Forests to ‘remove export permits for SBEP licenses in the North Kalum. QUALITY HOME CARE AND PERSONAL CARE PRODUCTS ARTISTRY QUALITY SKIN CARE AND COSMETICS NUTRILITE QUALITY NUTRITION AND FOOD SUPPLEMENTS 635-4618 Hazelton director Pete Weeber expressed the belief that the government would be the only loser in such a move because bids would go down on SBEP .sales, lowering stumpage fees ‘but leaving the same profit margin for the operator. Nass Valley director Harry Nyce expressed a degree of sup- port for the high-return export market, noting that Westar had used export profits to capitalize its mills, got their breaks years ago. They’ve paid off their capital, and now they’re crying ‘foul’... there’s something drastically wrong with this scenario.” Zaul Zap, a Canyon: City- based forest operation, recently acquired a small license on the north side of the Nass River. Nyce said the company is using export profits to build up capital. Whatever souwcar, We clean with care? 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