Housing demand boosts lumber sales

It's been a good summer for sawmills in northeastern Ontario and that has some thinking optimistically about the forest industry for the first time in years.

More Americans are building houses this summer, bumping up lumber prices. This is good news for the mill in Nairn Centre, located west of Sudbury, which was purchased by Eacom from Domtar two years ago.

The Nairn Centre mill still has a key client in Domtar's Espanola pulp and paper mill where Eacom's Brian Nicks said his company sells the leftover wood, which is still a big part of their business.

"Make no mistake, the viability of this mill is highly dependent on the viability of the Espanola pulp and paper mill," he said.

While lumber makes a comeback, the pulp and paper business continues to struggle.

But forest industry analyst Russell Taylor said it's hard to predict how long that will last.

"Of course we've been all saying this for probably too many years now we always thought the recovery would be quicker," Taylor said. "We do believe though that, certainly in the next two years, we're going to see very strong markets."

Skilled worker shortage

The large number of sawmills that closed during the recession means the ones that survived don't have any trouble finding customers.

When the Nairn Centre plant, plus mills in Timmins and Elk Lake, wasbought by Quebec-based Eacom two years ago, vice-president Brian Nicks said the company predicted the lumber market would rebound.

But he said they have had trouble convincing skilled workers who left the forest industry to work in the mines to come back.

"Both industries are cyclical," Nicks said. "It's just that mining seems to be very solid, especially given the China growth story. But we're optimistic that solid wood is going to have a good, long run here."

Nicks added demand from China is also part of the turnaround for sawmills in the northeast. He said BC wood companies are sending most of their lumber across the Pacific, leaving the US market to Ontario mills.