General Manager's Report
Review of the 2000-2001
Operating Year
RCFC's eighth year of operation started off well with good demand and prices for cedar which helped to increase average log prices and keep operations in the black for the eighth straight year. The high cedar prices also allowed us to blend significant amounts of low grade, low value, pulp wood into our logging program early in the year before demand for pulp dropped. At our April 2001 year end, RCFC recorded a consolidated after tax net income of $353,301 on revenues of $7,053,207 which was an improvement over budget forecasts. Retained earnings since the company's inception have increased to $3,097,981 after payments of dividends and interest to the City of Revelstoke. | |
| Average sales prices from the RCFC log sort yard increased to $111.48/cubic meter from $102.20/cubic meter in the previous year, while volume increased to 28,382 cubic meters from 24,105 cubic meters. Log costs, including sort yard costs, were $101.00/cubic meter, up from $96.56/cubic meter the previous year. |
| FOREST MANAGEMENT PLANNING |
| The 2000-2001 operating year saw the completion of a number of important forest planning initiatives that had been in progress for a while. The acceptance in principle of the Revelstoke Land Use Plan by the Provincial Government was announced in April of 2001. To those of us who are charged with having to create and implement development plans for the forest resource, while at the same time protecting and maintaining the many other resource uses and wildlife species present in the area, having an "upper level plan" that is acceptable to the community and the government agencies is a great benefit. It enable us to plan with some degree of certainty where and how much timber harvesting can take place in a given area while maintaining sufficient quantities of habitat for the various animal species found there. For RCFC in particular, it has allowed us to plan a network of corridors and patches of mature forest across the landscape, which will form the core protection areas for mountain caribou, grizzly bears, ungulates and help to maintain biological diversity. Of course, our knowledge of the ecological function of certain species and habitats is incomplete, but as we study and conduct inventories of the different species, we can adjust these "Mature Forest Retention Areas" to ensure that the areas of greatest benefit are retained. The other major planning accomplishment was the completion of Management Plan #3 for TFL 56 with the Chief Forester's acceptance of the plan on April 18,2001. Management Plan #3 was the culmination of over 30 months of work and consultations with various resource ministries and the general public. This plan outlines in detail how RCFC will manage the 120,000 hectare land base within TFL 56 to meet goals for timber production, wildlife habitat, recreation and all other resource uses that occur in the area while maintaining jobs and contributing to the local and provincial economies. Part of the process was to determine the timber harvesting land base and consequently, an appropriate harvesting level for the Tree Farm Licence. While a significant portion of the traditionally operable forest was set aside in our plan to meet the needs of wildlife and biodiversity, we made commitments to harvest steeper and poorer stands of timber, with helicopters and longline yarders, which were not previously considered operable. This enabled us to recommend that the harvest level remain at its original level of 100,000 cubic meters/year for the next five years to protect jobs in logging and manufacturing. The downside is that the cost of our logs will increase and the quality may decrease, negatively affecting our bottom line. After careful review, the Chief Forester of B.C. accepted our recommendations and approved the proposed Allowable Annual Cut. | |||||||||||||||||||||||
| TIMBER HARVESTING AND DEVELOPMENT | |||||||||||||||||||||||
 Photo: Schiller Contracting's 90 ft. Madill yarder working on CP173 Blk 3 Sorcer Creek | Approximately 250,000 cubic meters of timber were cruised and laid out, or in approved cutting permits at the end of the operating year. Emphasis is now being placed on ensuring that our developed timber inventory contains timber stands, which represent the full range of harvesting systems, seasons, species and wood quality, found on TFL 56. This is very important in allowing us to tailor our logging programs to meet specific market conditions. Road construction continued throughout the TFL, with 15.2 km of road being constructed in eight different locations. As in previous years, only locally based contractors were eligible to bid on road construction projects. | ||||||||||||||||||||||
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| 91,004 cubic meters of timber were logged and delivered from TFL 56 in the past operating year. In addition, approximately 10,000 cubic meters of pulp grade logs had to be decked in the bush late in the year as both Cache Creek Woodchips and Celgar Pulp shut down leaving us with no market for this material. Celgar Pulp in Castlegar started accepting pulpwood deliveries for a month this past summer, but has since been shut down until further notice. Cache Creek Woodchips ceased accepting puplwood in February 2001 with the permanent closure of Georgia Pacific's Bellingham Washington pulp mill. There are presently no plans to reopen the plant. Finding a market for pulp logs will likely remain a challenge for the next year or two, until the world pulp market improves. In the interim, we are trying to avoid stands with a high pulp content, although this is difficult with our largely decadent wood supply and high hemlock component. | |||||||||||||||||||||||
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| SAWLOGS / PULPLOG BREAKDOWN |
(Cubic Meters) - 2000-01 | (Cubic Meters) - 1993-01
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| REVELSTOKE WOODLANDS SAFETY COMMITTEE |
| RCFC continued to be an active supporter and member of the Revelstoke Woodlands Safety Committee in the past year. This group was formed in 1999 to promote safety in all aspects of woodlands operations in the community and to provide consistency in safety enforcement for all contractors between the various company operations. The committee is composed of representatives of the main logging, hauling and road construction contractors who work for RCFC, Downie Timber, Joe Kozek Sawmills, Beaumont Timber and Bell Pole, along with company supervisors and managers. John Werstuik of Essential Safety Services continues to chair the committee. The committee has helped to raise safety awareness among contractors and workers and the results are noticeable with reduced lost time accidents and thankfully, no fatalities in the past year. Congratulations to all those involved. |
| LOG MARKETING |
Our Log Sort yard on Highway 23 North continues to be the primary means of selling our portion of the logs produced from TFL 56. 28,382 cubic meters were processed and sold by competitive bid during the past year at an average price of $111.48/cubic meter. The decks of timber to be sold are advertised weekly through faxing of tenders to interested parties as well as posting them, complete with digital photos and size details, on our corporate website. We continue to maintain an excellent reputation for supplying a consistent, high quality product which commands premium price on the open market. A summary of the products and prices for the last two years is included in this report. Pulpwood produced from logging operations is sold under contract directly to customers to reduce handling costs and breakage. In the past year, Celgar Pulp purchased 25,223 cubic meters, Georgia Pacific, 7,228 cubic meters and JD Mill 1,057 cubic meters. As discussed previously, the deteriorating global pulp market has resulted in serious disruption to pulp mill operations and eliminated all our usual markets for pulp logs. While Celgar has indicated that they will commence operations in the fall, contract volumes will be reduced and it is highly unlikely that they will be able to absorb our entire pulp wood production, including wood decked this past spring. To compound the problem, pulp wood prices have dropped by $5.00/cubic meter resulting in a substantial drop in revenue. |
| SPECIES DISTRIBUTION OF SAWLOGS (%) |
2000-01
| 1993-01
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| SILVICULTURE |
| This past years silviculture program was smaller than in previous years due to smaller harvesting programs in the past few years. 239,418 trees were planted on 185 hectares of logged area, with 45.5% spruce and 38.8% cedar being the primary species planted. White pine at 8%, Douglas Fir at 7.2% and hemlock at .5% made up the remainder. Surveys were carried out on 2,850.8 hectares of plantation to determine tree survival and health. 3,243 hectares of reforested area has been declared "free to grow" on TFL 56.58.9 hectares were prepared for planting. The cost of the 2000-2001 silviculture program was $524,177. |
| FOREST RENEWAL B.C. |
2000-2001 was the third year of our Multi Year Agreement with FRBC. $316,020 was spent on the following activities and projects: | |||||||||||||||||||||||||||||||||||||||||||||
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| The focus of our FRBC program has been changing in the past few years from addressing watershed/road issues to conducting inventory work on the various resources contained in TFL 56. We have completed all the high priority watershed work on the TFL and are continuing to work on the Jordan River watershed near Revelstoke. The Jordan is a high priority watershed for fisheries values but there was no Multiyear Agreement holder willing to complete the work, so RCFC agreed to take it on. This work has a target date of 2003 for completion. Enhanced forestry projects such as spacing and pruning will continue to be the primary targets of silviculture funding, along with surveying and treating backlog silviculture plantations until they reach are "free to grow" status. |
| ENVIRONMENTAL PROTECTION |
| The completion of the planning work for our Mature Forest Retention Areas (MFRA) to meet the Ministers Advisory Committee's (MAC) recommendations for Mountain Caribou, biodiversity and winter ungulate range, has given RCFC a good foundation to manage the non timber resources in the area. We are now undertaking projects to inventory and map habitat for less well known and understood species such as the Northern Goshawk and the Northern long-eared myotis. |  Photo: Marinex Construction 'end hauling' on the Brewster Creek Road |
| A project has also been started to identify the structural attributes of the old growth forests in the area so that we can assess the areas we have included in our MFRA's to see if they are good candidates to be included as Old Growth Management Areas (OGMAs). | |
| CONCLUSION |
Once again, I would like to take the opportunity to thank the many contractors, consultants and suppliers for the excellent work and service that they have provided to RCFC during the past year. I would also like to thank the many customers who purchase logs from our sort yard for their business and interest in RCFC. I must also thank our Board of Directors and our industry partners for their trust and support and, most certainly, my staff who do an excellent job for our shareholders, the citizens of Revelstoke, and make the day to day operation of RCFC an enjoyable experience.
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of Contents] [Mayor's Address] [Foreword]
[Chairman's Report]
[General Manager's Report] [Log
Sales Reports] [Ortho Photo]
[Financial Statements] [Corporate
Data] [Board of Directors]
