Straight talk from the executive suite

It is impossible to ignore the widespread public perception that the forest products industry is a sunset industry that cuts trees and degrades the environment. So, with demand currently weak for products such as lumber and newsprint, people naturally question the future for companies like Tembec. Here’s some straight talk on these issues.

Is the lumber industry in permanent decline?

Technology has not been able to replace lumber. We believe the ongoing weak markets in North America are cyclical, not secular. As a renewable resource and the most carbon-friendly building material, lumber has a future in a world that rightly values sustainability.

World population has doubled to seven billion since 1968 and is expected to increase to eight billion by 2025 then to 9.3 billion by 2050. This type of growth suggests a long-term need for new construction. That calls for softwood lumber, which is tremendously versatile.

Does the forest products industry have a future in a high-tech world?

We see a big future in forest products that go into electronics. One of the many applications of specialty cellulose is in the optical film in the LCD (liquid crystal display) technology in smart phone and computer screens. This gives the forest products industry access to a high-margin growth market, to counter the continuing decline in traditional markets, such as newsprint.

Other growing industries such as pharmaceuticals, food, cosmetics and oil drilling rely on specialty cellulose products, so we are naturally investing in that business.

Specialty cellulose complements the commodities, such as pulp and lumber, which are core businesses for Tembec – and highly sensitive to economic growth. The balance makes us a more stable business that will have real upside when the economy upturns.

Is logging contributing to deforestation?

We plant more trees than we cut, overall. Responsible forest management calls for prompt regeneration of logged areas, so it does not contribute to deforestation. And in those areas where the forest itself does a better job of naturally regenerating harvested areas than humans do by planting trees, Tembec lets nature do what it does best. In some areas, including France, it is our suppliers who do the work, but the point is that regeneration, mainly replanting, always takes place. 

We are proud to have forest operations in Canada, where the law demands regeneration after logging and the rate of deforestation is essentially nil. This is in contrast to the tropics, where deforestation accounts for some 20% of greenhouse gas emissions worldwide.

Can renewable energy reduce your reliance on conventional energy?

It already has – and Tembec has become an energy producer. Canada’s pulp and paper industry now relies on renewable energy for a full two-thirds of its energy requirements. Most is from biomass which generates green steam and green electricity. Tembec also creates biogas from effluent treatment facilities, and it replaces fossil fuels. And five of our operations cogenerate electricity.

Biomass, biogas and cogenerated electricity projects now underway will expand Tembec’s renewable energy production. And we are planning major investments in cogenerated green electricity that will make us an even bigger producer.

Are sustainable forestry and renewable energy just greenwashing?

We work here, we live here, we play here – so we take these issues seriously. The great majority of our people work in forestlands or at operations located in regions where forests, waterways and wildlife are the defining features. So we naturally want to sustain that way of life, and protect the environment where we live and play. In many cases, Tembec operations are literally in our own backyards, so all this matters to us.

The Forest Stewardship Council® (FSC®) certification for all Tembec-managed forestlands takes into account local environmental and social needs, so we are highly attuned to community standards on that level as well.

Responsible forest management, using biomass and bioenergy to reduce fossil fuel usage, and cogeneration, are good for the environment and the community at large. They are good business too, and will help to ensure the future of our company.