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Last month, I talked about the mining sector in Kamloops and what it contributes in jobs for the region.  Jobs are critical to Real Estate values because of the following formula:

GDP Graph

This month the feature employer is Forestry.

British Columbia is the leading exporter of forest products in Canada at more than $10 billion/yr. Recent years have shown a marked increase in exports.

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2013 yielded 37 million cubic meters of BC forest product exported to the USA, Japan, China and other nations.

4 million cubic meters come from the Kamloops Forest District, representing about $1B in exports coming from the Kamloops District.

 

Fibre Flow

“Fibre flow” is the term used to describe the movement of fibre (logs) from the point of harvesting the trees to processing facilities.

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Kamloops is the 7th largest forestry district in BCs Southern Interior for volume of logs harvested and/or scaled.

 

Mills

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Domtar Pulp Mill produces various paper products and employs about 300 people, and at least that many contractors. Numerous new efficiency upgrades ($120M since 2011) will extend the mill’s life another 20 years.

Domtar’s Kamloops mill is one of few that can process pine beetle kill and keep up quality. Despite a recent closure of a small “A” line, the Domtar mill has good prospects.

 

 

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Tolko operates the Heffley Creek Plywood Plant which employs about 200 people. Most live in Kamloops as it is a short 20km by highway.

There are also numerous Tolko lumber, plywood and manufacturing plants in the central interior. There is even a nursery in Armstrong.

These plants all rely on the trucking industry, and support this major employer in Kamloops.

Kamloops is at the cross roads of BCs major highways and many Tolko/Domtar products must pass through Kamloops for use in large markets such as the lower mainland or to be shipped to other countries.

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Domtar and Tolko each have survived the volatility of the 2009 USA housing crash that forced many mills to close. As such, they will be poised to take advantage of the lumber super cycle projected to start in 2015.

 

Manufacturing

Many manufacturing and fabrication companies (over 125) are based in Kamloops, like Loewen Equipment Manufacturing, a builder of heavy equipment used in logging.  Small business like this employ hundreds of people in support of the forestry industry and do much to support the Kamloops economy.

 

Summary

Global demand for wood products has been steadily increasing since the low of 2009, and Kamloops is well positioned to reap the rewards of a comeback in the global housing market, especially in the USA.  Changes in the economic cycle are coming soon, and the fact that both mills in Kamloops remain in service means it will be much easier for them to increase production in response to higher demand. Several industry observers are predicting an upcoming boom, and although the Forestry sector is “boring” there is money to be made.

The Kamloops Forestry District is responsible for $1B in exports, about 1500 jobs, and is a driver of the local economy that is here to stay.

Next month’s feature employer will be Health Care, so be sure to Subscribe so you don’t miss out on the next in this series of Kamloops’ employers.

Until next time,

Stay S.A.F.E.