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Tolko Products and Services

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2 Tolko Products and Services
Tolko is based in Vernon, BC and has been privately owned by the Thorlakson family since its beginnings in 1956. Products and Services Tolko manufactures lumber, plywood, and OSB products and provides logistics and brokerage services.

3 Mission To be an environmentally responsible and innovative company that prospers and grows by serving the needs of diverse customers in world markets, with products derived from the forests. Vision To be a leading marketer and manufacturer of specialty forest products.

4 History 1956 Founded as Lavington Planer Mill 1981
Purchased Ernst Forest Products in Quesnel; renamed Quest Wood Division 1987 Purchased Balco Industries Ltd (Nicola, Louis Creek, Heffley Creek) 1992 Diversification Plan 1994/5 Greenfield Operation – High Prairie OSB 1997 Purchased Repap Manitoba Manitoba Solid Wood Division, Kraft Papers Division

5 History 1999 Purchased High Level Lumber Division 2001/2
Greenfield Operation – Meadow Lake OSB 2004 Purchased Slave Lake OSB Acquired outstanding shares of Riverside 2005 Greenfield announced Athabasca (EWP) 2007 I-joist Plant Constructed 3rd OSB facility Athabasca

6 History 2008 Indefinite curtailment of High Prairie Division
New corporate office in Vernon, BC completed 2009 Indefinite curtailment of Manitoba Solid Wood Division 2010 New President and CEO – Brad Thorlakson Tolko signs first mill-supply agreements with China 2012 BC Export Award Winners 2014 Reopened Athabasca facility 2016 Sale of Manitoba Kraft Papers division Closure of Nicola Lumber division 2017 Re-start of High Prairie OSB

7 2016 Production Lumber 4.5 million m3 Plywood
344 thousand m3 (3/8” basis) OSB 1.2 million m3 (3/8” basis) Kraft Paper 127 thousand metric tonnes Wood Chips 1.01 million BDU (bone dry units) Electricity 272 thousand megawatt hours

8 Tolko Locations Lumber Plywood/Veneer OSB

9 Tolko Overseas Exports

10 Logistics 17 carriers to Pacific Rim, Middle East, Oceana, Central America, South America, Europe Tolko’s Lulu Island Terminal 1250 containers exported monthly 1.2 million m3 per year

11 Transportation – Alberta Mills
Volume of traffic for Tolko: High Level – 3800 railcars, 350 trucks per year On average 15 rail cars per day 95% of volume moves by rail High Prairie up to 3000 railcars per year after production ramps up. Athabasca up to 3000 railcars per year Product moves south primarily to US markets and also to Port of Vancouver.

12 Transportation – Alberta Mills
Biggest challenges we have:  Mainline too small  (need to increase to 286,000 GRW - currently limited to 268,000 lbs) Line capacity - CN is unable to handle all of our traffic inbound and outbound everyday. CN service - timing of planned service can be hit and miss, especially during the winter operating months. The movement of grain is prioritized over other commodities, when demand for grain movements surge. Railcar availability - seasonal demand for cars has a significant impact during certain times of the year, biggest impact is during the late winter months. Our loading facilities have sufficient loading capacity to match typical production levels.

13 The road ahead Need to upgrade existing line from Edmonton up to 286,000 GRW (gross rail weight) mainline weight standard. (currently limited to 268,000 lbs) Tolko uses a warehouse in the lower mainline where product is consolidated and mixed from all of our operating units. Although there may be a geographic advantage for High Level Lumber Division, there would be no freight advantage for a rail line to Alaska. Movement of other commodities (oil, grain, etc.) would ease the railcar and seasonal shortages Tolko experiences.

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