Canfor Update Prince George City Council - November 16, 2015 Canfor - PowerPoint PPT Presentation

Canfor Update Prince George City Council - November 16, 2015

Canfor Corporation CFP

Canfor Corporation (CFP) Sawmills Canada ••• 11 in BC • c. • ' .1 • 1 in Alberta 10 in US South (4 in Carolinas, 3 in Alabama; 2 in Georgia & 1 in Mississippi) US South Capacity: 5.7 billion board feet Green Energy 1 Plant in Alberta 3 Pellet Plants in BC Legend 2014 Pulp Sales 2014 Lumber Sales • $1.1 Billion $2.2 Billion Sawmills United States • Americas Green Energy Asia Asia • Canada Pulp Mills Europe Other 3

Significant Strategic Upgrades From 2010 to 2014, the Canfor lumber business has invested more than $650 million in total capex in regions and operations with excellent fibre base: Planer Energy Productivity Grade Upgrades Improvements Optimization Systems $100 million has been spent on sawmill and planer upgrades at facilities in the Prince George region since 2010. $2.7 million in combined spend on capital dust mitigation projects at Prince George facilities. 4

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Pulp Operations Canada Pulp Mills 2 • 4 • •• 1 3 1 Intercontinental 5 6 2 Northwood 3 Prince George Key Products 4 Taylor .. 1. Pulp 2. Pulp '· 3. Pulp, Kraft Paper 5 Canfor Pulp Ltd./ 4. BCTMP Pulp ./ Canfor Pulp Products Inc. ji Head Office 6 Canfor Pulp Innovation i Total Economic Impact of Canfor Pulp Population: 84,000 Direct jobs at Canfor Pulp: 1,117 in 2014: $668 Million 6

Significant Capital Investments From 2010 to 2015, Canfor Pulp has invested more than $400 million on capital upgrades in Prince George: Air Quality Power Productivity Continuing Improvements Improvements Investment Generation $190 million has been spent on odour and particulate reduction $58 million has been spent to increase power generation and energy efficiency $53 million has been spent to improve productivity $102 million has been spent on continuing investments to maintain the mills 7

Reducing Particulate Cantor Pulp: PG, IN and NW Total Particulate Emissions Trend (t/day) 1999 - 2014 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00

Reducing Odour (TRS) Prince George Annual Average Ambient TRS 14 Plaza 12 Jail Foreman 10 Van Bien Lakewood 8 ugm/m3 Exploration Place 6 4 2 0

~ Reducing Greenhouse Gas CO 2 e Emissions Trend From 1990 to 2013 450,000 -- Northwood Pulp Mi ll 400,000 350,000 300,000 V ; 250,000 ! -~ 200,000 ~ ] 150,000 100,000 50,000 1990 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Markets

China Imports (MMfmb) 14,000 2007 Low 12,000 Grade, 93% Source: China Customs 10,000 Volume (MMfbm) #2 8,000 Grade 7% 6,000 4,000 Low 2,000 Grade 2014 59% #2 Grade 0 19% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: China Customs Prime • Others • New Zealand • Indonesia • Malaysia • Thailand • USA • Canada • Russia 21% 12

US Lumber Demand - - Housing starts not the Only Market to Watch Four-Quarter Moving Total in Billions Four-Quarter Moving Rate of Change 10.0% Homeowners Improvements 7.7% $160 6.5% 10.0% 6.1% 5.6% 4.3% 4.0% 3.5% 2.8% Rate of Change (%) $150 2.2% 5.0% US Lumber Demand $151 (Billions of $) $147 $140 $146 $146 0.0% $145 60 $143 $141 $139 $130 -5.0% $133 $132 50 $120 -10.0% $110 -15.0% 40 $100 -20.0% 30 20 1,600 1,350 10 1,300 1,400 1,250 1,100 1,200 975 925 0 1,000 2013 2014 2015 2016 2017 2018 2019 800 600 • R&R • Industrial • Non-residential 400 • Mobile Homes Multi Family Homes Single Family Homes • • 200 - 2013 2014 2015 2016 2017 2018 13

Pulp: Sustained Ebitda Performance Against Peers Pulp EBITDA per admt pulp (rolling four quarter average) $300 Reinforcing top quartile performance: $250 • Ongoing operational excellence focus $200 $ EBITDA / tonne • Energy optimization $150 • Enhancing offerings of premium pulp and $100 specialty paper $50 • Over $250 million of capital investment $0 since 2010 -$50 Producer 1 CFX Producer 2 Producer 3 14

Canfor in Prince George Donations & Scholarships 2015 Canada Winter Games IN • • $185,000 donated locally in 2014 $300,000 on Games tickets; $150,000 in MS AL GA lumber; $200,000 in cash • Kordyban Lodge • Over 500 high school students brought in from • UNBC surrounding communities to tour UNBC and • United Way of Northern BC • Lheidli T’enneh First Nation attend a hockey game • Spirit of the North Healthcare FL • Canfor House Foundation • • Warming hut in Games village Dry Grad sponsorship • • 5,000 beardos and other merchandise High school, college and university distributed scholarships • • 70 employee volunteers Other • Legacy venue for Outdoor Ice Oval 15

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Contacts Stephen Mackie Martin Pudlas Senior Vice President, Canadian Operations, Canfor Vice President, Operations, Canfor Pulp