:P
http://www.cbc.ca/money/story/2007/01/29/abitibibowater.html?ref=rss
They were both losing money, does this mean the new company will hemmhorage big time? I have to wonder how this merger will ensure survival.
The big boys are "glad handing" & the plants keep closing. >:(
This one is a sure sign of the mess this industry is in...
Wait until they start slashing all the jobs that are duplicated in the various sections of the two companies, personnel, sales, finance types...
Then they will start on the mills that are the least profitable now that they have a larger choice of the ones to keep..
Then comes the increased pressure of the more powerfull company on its suppliers, until it filters its way down to the lowest level, the boys in the woods who are just about all broke before this even happened..
Time to go to the oil fields boys...
http://www.cbc.ca/canada/new-brunswick/story/2007/01/30/nb-abitibibowater.html
Abitibi and Bowater say the move will help them compete in the pulp and paper industry by saving almost $300 million, but whether those savings will come at the cost of job losses or mill closures is still unclear.
Bowater Inc. operates a mill in Dalhousie, on the Bay of Chaleur, that employs 315 people. The merger proposal has many people wondering about the future of the mill.
I bought my land from Bowater, actually it was Hiawassee which is a part of Bowater. I know this summer they released some 344 thousand acres for sale mine being a small part of that.
As with any merger the small man will lose.
Forestry: Pulp and Paper Industry In Depth (http://www.cbc.ca/news/background/forestry/)
There is a big transition taking place in the business. The big companies are all selling their land or re-organizing because of the tax disadvantages that traditional forest products companies face against the Real Estate Investment Trusts (REITS) that are taking over the ownership of timberland. A REIT gets favorable tax treatment versus other types of land ownership.
OSB prices are at the floor because of all the new capacity that has come on line flooding the market. Plywood is in its death throes. Lower demand is killing lumber, and the paper business is becoming the "buggy whip business done in by the automobile" as the world goes to computers and electronic files (who files paper anymore?).
The tax legislation aimed at giving the traditional forest products companies favorable tax treatment more like the REITs failed to pass last december. I have heard it said (from a knowledgeable Forestry Professor who is an expert in these matters) that for every dollar made, a traditional forest product company and its stockholders keep $.46. The rest is taxes. For the REITs, for every dollar they make, they keep $.86. This is spelling the doom of the big timberland owning forest products company. There are only two left who are fully integrated with manufacturing mills and timberlands, and the pressure on them to divest of the land is huge and has made the news in the last two months. GP sold a few years ago, and International Paper sold all its land last year. Mead Corporation announced yesterday the sale 300,000 acres of timberland in Alabama, Georgia, and West Virginia.
It is gonna get very rough before we weather this current economic cycle. Wall Street is not going to let the companies "just ride it out" until things get better.
There's some kind of a loop hole up here I'd say. Fraser's sold off it's land to Acadia Forest Products. I know it's still Fraser's, and I'm quite certain it was all a tax savings/cash gimmick for the company. We don't have much going on as far as Real Estate Investment Trusts on forest land. It is primarily on developed land. When large freehold gets sold here its another forestry company that grabs hold of it.
Canadian Real Estate Investment Trust (http://www.creit.ca/rei.cfm)
Real Estate Investment Trusts (http://toby.library.ubc.ca/subjects/subjpage2.cfm?id=422)