Forest products CEO collaborate for profit: PWC

Focusing on non-traditional business models for sustainability and growth: PWC.

Strong market for softwood lumber.

VANCOUVER — After several challenging years, the world’s forest products sector is showing signs of recovery, and Canadian companies are collaborating to take advantage of growth opportunities, according to the forestry segment in PwC’s recent 16th Annual CEO Survey.

“We are seeing optimism that demand and prices will continue to strengthen in the solid wood sector, but recovery in the pulp and paper sector will likely lag,” said Mike Vermette, partner in PwC’s Deals practice.

If US housing continues to rise over the medium term and China’s economy continues to grow as predicted, he says the stage is being set for a potentially strong market for softwood lumber.

He says CEOs are still watchful of economic volatility, energy costs, access to raw materials, and a shortage of skilled labour, which if not carefully managed, may limit growth once the sector kicks into high gear.

The survey results show forest products CEOs are targeting pockets of opportunity and applying non-traditional business models as a way to control costs, manage risks and develop new markets.

Half of those surveyed said they entered into a new strategic alliance or joint venture last year, in some cases involving new business areas or with organizations along the supply chain.

PWC cites an example of a strategic alliance that involved four BC forest products companies chartering a cargo ship to move their products to the developing Chinese market.

“This collaboration allowed these companies to decrease logistic uncertainty and risk which has plagued exporting goods to Asia in recent years,” said the global consulting company.

Click here for forestry products sector results.