Forestry: Increased demand and a changing customer base

While other industries are feeling the pinch of non-essential service shutdowns, forestry has experienced setbacks but is doing well so far.

The pandemic has given rise to a new reality, one that’s still changing and has yet to hit some industries in full force. This is certainly true for the forest industry, which is benefiting from increased demand and, as a result, higher prices for consumers.

However, the industry has also experienced setbacks. Some of the forestry sector’s key issues predate the crisis, but have been exacerbated by it. Like the vast majority of industries, adjustments are needed.

Short on supply, high on demand

A number factors have led to increased demand for wood products. Last March’s business shutdowns resulted in a supply shortage, which pushed up prices. The shortage was then exacerbated by increases in:

Plants have responded by significantly stepping up production, but the increased activity has come at a cost. That’s because running at full capacity while implementing new safety measures has left business owners with little time to invest in innovation.

Innovating to future-proof operations

As demand spikes in Quebec, businesses have less need to export wood to other markets. But will local demand falter when the crisis is over? Will Quebecers still need as much wood as they did during the first few months of the pandemic? There are no sure answers to these questions—and that’s precisely why the industry needs to make innovation a top priority.

Attracting and retaining workers

The value chain has also been affected significantly, with direct impacts on forest workers. While they typically spend several days away from their families every month, the spring lockdown allowed them, like many other Quebecers, to stay home for weeks. When businesses reopened, returning to the forest was difficult for many of these workers and their families—especially those with young children. This, in turn, made it harder for businesses to find and keep skilled personnel. Employers don’t just need to recruit young talent, they also have to entice them into staying. This is a widespread challenge that could affect the vitality of the entire industry.

The COVID-19 crisis has deepened concerns about the future of paper, accelerating the decline in demand by approximately 5 years. This is forcing pulp and paper mills to adjust quickly.

Innovation success stories

Groupe Lignarex Inc. is one company that understands the challenges that lie ahead. They’ve already revised their entire production line and consolidated their value chain in order to strengthen ties with clients and suppliers. Meanwhile, Granules LG Inc. has innovated by using biomass, an environmentally friendly and locally sourced product, to optimize output and increase profitability. These are two great examples of companies preparing for the future!

There’s no question that the forest industry is being redefined. Now’s the time to strengthen the industry and position Quebec as a leader. We’re lucky to have this high-value renewable resource. It’s up to us to make the most of it.