Today’s Forests Tomorrow’s Markets March 31/09 to April 1/09 Sault Ste Marie, Michigan Global Trends in the Forestry Sector By Frank Dottori FADCO Consulting Inc.

2 1.0 Status of Today’s Forests 1.1 Canada Eastern – Overcut Western – BC-Beetle Central – Manitoba – Excess/soft wood – Saskatchewan – Excess/hard wood – Alberta – Excess/hard wood

3 1.2 US West – Limited/ENV. North East – Overcut South East – Balance Central - Overcut 1.0 Status of Today’s Forests

4 1.3 Europe Scans – Short Fall West – Balanced East – Excess/Old Russia – Excess/Old

5 1.0 Status of Today’s Forests 1.4 South America Chile – Balanced Brazil – Plantation Growth Other – Plantation Growth

6 1.0 Status of Today’s Forests 1.5 Asia South East Asia – Plantation Growth Indonesia – Overcut

7 1.0 Status of Today’s Forests 1.6 General World will move to plantation forests with hybrids. Sam, Sea Little growth in North America and Europe

8 2.0 Today’s Markets 2.1 Lumber Mostly North America and Northern Europe for housing Little in rest of the world due to climate, culture, insects

9 2.0 Today’s Markets 2.2 Today’s Markets Building products, Engineered wood growing as above

Today’s Markets 2.3 Pulp and Paper News Continuing decline in usage/capita in developed countries Electronic/high tech age Growth by volume as standard of life/education improves – 2 nd and 3 rd world.

Today’s Markets 2.4 Personal Products Continued growth as quality of life improves

Today’s Markets 2.5 Packaging Growth driven by health and quality concerns Thin/Less/Recycle Limits tonnage not surface

– Plantation Type Forests in South America and South East Asia Supply commodity Pulp 3.0 Tomorrow’s Forests

Tomorrow’s Forests 3.2 Manage Forests Europe/North America Environmental Pressures Certification FSC other Multiple use

Tomorrow’s Forests 3.3 Climate Change Species change in natural forests Harvesting issues – Northern Canada Disease Insects

Tomorrow’s Forests 3.4 New Vision Solar Powered – Natural Carbon Cycle/No GHG Renewable, Sustainable

Tomorrow’s Forests 3.5 Cost of Wood Fossil fuel alternative Will increase Energy Equivalent

Tomorrow's Markets Lumber Will remain most profitable sector for North America and Europe and grow moderately

Tomorrow's Markets 4.2 Engineered Wood Will grow with increase use of Hard Wood species

Tomorrow's Markets 4.3 Pulp and Paper Moderate to slow world growth Decline North America and Western Europe Growth South East Asia but will be moderate due to technology

Tomorrow's Markets 4.4 Tissue/Packaging Continued Growth

Tomorrow’s Potential Markets 5.1 Forests are Solar Energy Power Knowledgeable Environmentalists and Politicians will soon recognize this (solar cells, batteries, pollution) Replacement for fossil fuels with no GHG effect Renewable/Sustainable/Come with battery/Storage Industry needs to exploit virtues of forests

Tomorrow’s Potential Markets 5.2 Energy Biomass to electricity and heat power Technology available need equivalent support to other sources Wood to gas/liquid fuels  Still technical and economic challenges  Rapid progress, lots of R&D dollars spent (3-5 yrs)  Big players  Be careful

Tomorrow’s Potential Markets 5.2 Energy Cont’d Biomass to Liquid Fuels  Very Difficult at technical/economic level (5 to 10 yrs) Biomass to pellets  Technology and economics acceptable depending on alternative fuels, cost and legislation (now).

Tomorrow’s Potential Markets 5.3 Wood to Biochemical's Lignin, Phenols, Acidic Acid, Alcohols, Polyethylene etc.etc. Challenging technically and economically (3-10 yrs)

Tomorrow’s Potential Markets 5.4 Will it Happen Yes but watch the hype Major Challenges Lots of dollars committed

Tomorrow’s Potential Markets 5.5 Do We Need It Yes, if we believe GHG threatens planet Nuclear and Forests are the major options Forests are best by far Problem only 10% of solution

Tomorrow’s Potential Markets 5.6 What is Greenfield Doing Two prong approach Thermo chemical – Gasification Biochemical – enzymes/yeast Objective: Transportable fuels and Biochemical’s Challenging but progressing well

Conclusion Life comes from the sun and the earth Cellulose (trees and vegetation) are the carbon cycle or life cycle Forests will be Forever as long as the planet exists Our survival depends on forests Lets protect them, use them wisely Help save the planet Solve economic issues today by planting trees for the future