Local hardwood dealer watches big market
Published 12:00 am Saturday, April 21, 2001
With 60 percent of his company’s business coming from international sales, Lee Jones keeps a sharp eye out for changes in the global marketplace.
Jones, vice president of J.M. Jones Lumber Company of Natchez, travels around the world to sell hardwood lumber.
Moreover, he looks for any opportunity to make a difference in his industry. In June, for example, he will travel to Vietnam to conduct a seminar for workers interested in learning about manufacturing furniture and doors.
&uot;There are 77 million people in Vietnam, and they all want to work. They have cleared all their forests; so they will have to import wood for manufacturing,&uot; Jones said.
&uot;And there will be a painful few years they will have to go through when they won’t be able to buy their products but will have to export them for sale.&uot;
The Chinese have gone throught that during recent years since they began similar manufacturing, he said. &uot;Now they are beginning to say, ‘well, maybe we can put hardwood floors in one room’ or ‘maybe we can buy this piece of furniture.’&uot;
Among recent concerns about the lumber industry is the rising cost of energy, which is affecting production of forest products on a global scale.
&uot;Oil prices are up; energy costs rise; people have less money to spend on furniture, flooring and cabinets,&uot; said Jones, who in 1998 was chairman of the American Hardwood Export Council.
Energy costs have affected his own budget at the Natchez mill, with one winter month’s natural gas bill jumping from $6,000 to $21,000. &uot;We kiln dry with natural gas; we had to take that big increase out of our operating budget.&uot;
Still, the hardwood business is holding its own, he said. The pine lumber business is suffering.
&uot;All over the South and the East we’re overproducing,&uot; Jones said. &uot;The sawmills are increasing their production; the population is stagnated and the dollar is very high right now.&uot;
Recent news of the end of an agreement between the United States and Canada that limited the amount of softwood lumber into the U.S. markets from the neighbor to the north, has alarmed many with interests in the lumber industry, including Mississippi’s Ronnie Shows, who represents the Fifth Congressional District and serves on the Agriculture Committee in the House.
&uot;There are 67,000 jobs related to the forestry industry in Mississippi, and $1.5 billion is paid out each year in payroll taxes,&uot; Shows said in a recent statement. &uot;And, listen to this. The economic impact of forestry in Mississippi is $11 billion.&uot;
A spokesman for Georgia-Pacific, which employs 3,400 at 19 forestry products manufacturing facilities and a building products distribution center in Jackson, said the company is watching the Canadian market with concern but not alarm.
&uot;We think this is more about the trade agreement, and we support working with the Canadian government to reach a long-term agreement,&uot; said Robin Keegan, senior manager for corporate communications at the company’s Atlanta headquarters.
&uot;We do want it to come to a good and fair resolution. We operate all over the country.&uot;
In general, Keegan said, Georgia-Pacific has felt the lumber industry slow-down but expects an upturn with the spring season.
&uot;People can see that we have had better times, but we feel pretty confident we’ll see some strengths in panels and lumber sales in the spring,&uot; she said.
The five-year Softwood Lumber Agreement ended on March 31.
Four Canadian provinces were affected by the agreement, which placed quotas on the number of board feet that could be sold in U.S. markets.
Jones said he expects little effect in Mississippi from the expiration of the U.S.-Canadian pact, especially if the slumping Japanese markets turn around.
&uot;Canada would rather sell their lumber to Japan. The provinces that are involved are in the western part of Canada, and it’s cheaper for them to zip across from Pacific ports to Japan,&uot; Jones said.
The problem U.S. companies face in competition with Canada is that the Canadian government subsidizes the lumber industry there, Jones said.
&uot;It’s an uneven playing field. Here we have a bid day to sell trees. It’s a competitive bid, and the high bidder buys your trees and makes the lumber to sell.
&uot;In Canada, the government owns the trees. They figure a reasonable but not big profit and so they are creating jobs but also providing a subsidy for the lumber industry,&uot; he said.
Jones agrees with open-market policies but believes in a level playing field, too.
&uot;Let’s make the world an open market,&uot; he said, pointing out that the forest products industry in Mississippi is huge.
Timber is among the top three agricultural crops every year in all Mississippi counties outside the Delta, according to the Mississippi Forestry Commission.
Shows, along with Mississippi Sen. Thad Cochran and other co-sponsors, is sponsoring a bill calling on the Bush administration to make the lumber industry a top priority.
Shows said Canada’s &uot;unfairly traded lumber&uot; should be stopped, even if duties have to be imposed on it.
In addition, the international environmental community has taken a stand on the Canadian issue, stating through organizations such as the Northwest Ecosystem Alliance that the continued clearing of Canada’s western provinces is upsetting the ecology of the region and also the culture of the people who live in the region.
&uot;The situation in western Canada is having significant adverse effects on U.S. efforts to protect our shared threatened and endangered species,&uot; says a report published recently by the organization.
&uot;A vast majority of our wildest lands are found on this border.&uot;