Product Transportation Challenges to Market NCLGA Conference, Quesnel BC May 3, 2013

Agenda West Fraser – Overview Surface Transportation - Rail Challenges - Trucking Challenges Marine Transportation - Breakbulk - Containers - Prince Rupert - Port Issues Questions 2

First Mill

Vancouver Calgary Edmonton Williams Lake Quesnel Prince George Houston Hinton Whitecourt Slave Lake Chasm Chetwynd Smithers Fraser Lake 100 Mile Sundre Sawmill Panel Mill Pulp /newsprint Mill LVL Edson West Fraser Canadian Operations 4

LUMBER 27 mills PANELS 6 Mills PULP & PAPER 5 Mills SPF 3.8 Bfbm SYP 2.0 Bfbm Total 5.8 Bfbm Plywood: 830 MMsf3/8” MDF: 300 MMsf3/4” LVL: 3.2 MMcf NBSK: 590 Mtonnes BCTMP: 650 Mtonnes Newsprint: 135 Mtonnes North America’s largest lumber producer Largest plywood producer in Canada Third largest pulp producer in Canada West Fraser Today 5

West Fraser – Annualized Shipments 6 22,00073’ centerbeams 20,000boxcars 15,000chip cars 8,000intermodal vans 50,000trucks 60,000containers

West Fraser Transportation Overview Over $500 million per year in freight One of CN’s largest customers system-wide One of the top exporters through the Port of Vancouver 7

8 Railway Challenges

Rail Challenges 19 of 23 West Fraser facilities located on CN Rail Consistent, cost effective, reliable service is crucial to our business Railways are designed to meet average market place demand under optimum conditions – little room for error 9

Rail Challenges No effective competition for our captive mill operations West Fraser’s captivity to rail costs millions of dollars when rail service is poor Recent Federal Rail Service Legislation does not balance shipper/railway power 10

11 Trucking Challenges

Average age of a long haul trucker is 55 years old Shortfall of 500,000 drivers in North America by 2015 Costs of maintenance, fuel, labour and insurance increasing 12

Trucking Challenges Hours of service and increased safety regulations have reduced truck capacity More drivers choosing to work locally in container/intermodal business rather than long haul 13

14 Marine Challenges

Breakbulk shipping options becoming challenged Fewer carriers, increased waterfront taxes and public pressure for urbanization Customers like direct container service 15

Marine Challenges Supply chain can be affected by late vessel arrivals, changes in shipment volumes or container supply variability Vancouver ports are running close to 98% capacity during day shifts Vancouver used to be the “backhaul” rate 16

17 Port of Prince Rupert

Marine Challenges Port of Prince Rupert has added new opportunities West Fraser currently shipping lumber to Prince Rupert from Houston and Smithers only operations Need more container lines calling Prince Rupert, currently only 2 carriers Additional transloading infrastructure in Prince George would also be needed long term for pulp shipments 18

Q UESTIONS?