Posted Monday, December 03, 2007 the Working Forest
By Ron Grech

Bob Van Patten has a perspective of the impact of the rising Canadian dollar on the forest industry from both sides of the border.

He is the owner of North American Logistics Services which has its headquarters in Glen Carbon, Illinois but manages several forestry operations in Northwestern Ontario. It is currently spearheading the relocation of Nipigon-based Multiply Forest Products to nearby Red Rock.

Van Patten said the rising value of the loonie “hurts me from the standpoint of reinvesting in Canada in U.S. dollars because I’m getting less bang for my buck.”

Up to now, he said it hasn’t stopped him from putting money into his Canadian operations or investing in new opportunities north of the border.

“I haven’t changed my mind or my approach to business because of the impact of the rising Canadian dollar. I’m going to invest when the opportunities arise. But if it starts working to my disadvantage, I’m going to have to factor it in when making an investment.”

Van Patten could find it posing a challenge when looking to raise cash to finance future projects in Canada.
“It’s going to change the view of finance people on the return on the return of their investment. What it will mean for financing projects is that investors may ask for more equity to be contributed and less debt.”

He said the only foreseeable benefit to the rising value of the loonie “would be if I’m taking money out of Canada to cover my office expenses in the States because I wouldn’t need to take as many Canadian dollars to do it.”

In the meantime, Van Patten has been busy with preparations for the relocation of Multiply Forest Products to Red Rock.

He recently met with an equipment supplier at the mill site in Red Rock.
“They told us this week, if I make the equipment order within January time frame then it will be 12 months before we’re up and running. So we’re looking for a start up in December 2008 and then a ramp up to full production in January 2009.”

Once it’s up and running, the relocated mill operation will produce Multiply Forest Products’ line of plywood underlayment for flooring. The production will require 150,000 cubic meters of poplar annually. The mill will purchase the wood from contractors throughout Northwestern Ontario.

The operation will be managed by Red Rock Holdings Inc., a newly-formed subsidiary of North American Logistics.
It’s expected the mill will employ up to 120 people.