1. 2010/2011www.fpinnovations.ca1 FPInnovations TM A Program for Forest Products R&D and Sector Transformation Alan Potter Executive Vice President I-CAN Innovation School Charlottetown, PEI October 20, 2011

2. Introduction FPInnovations – Canada’s National Forest Products Research Institute Canada’s Forest Sector Transformation Strategy Implications for Future Forest Products Research Program Design 2 Canada’s Forest Sector Innovation Hub

3. FPInnovations is a merger in 2007 of Canada’s forest sector research institutes Feric – Forest Engineering Research Institute of Canada CWFC – Canadian Wood Fibre Centre of the Canadian Forest Service (CFS) of Natural Resources Canada Paprican – Pulp and Paper Research Institute of Canada Forintek – Canada’s National Wood Products Research Institute Canadian Wood Fibre Centre 3 Canada’s Forest Sector Innovation Hub

4. Federal Government Industry – 370+ Companies Provincial Governments Shared Priorities, Shared Risks, Shared Benefits, and Shared Costs British Columbia Alberta Saskatchewan Manitoba Ontario Québec New Brunswick Nova Scotia Newfoundland & Labrador Yukon A Collaborative Partnership 4 Canada’s Forest Sector Innovation Hub FPInnovations’ presence

5. Forest Sector Transformation Strategy More efficient and effective business processes with respect to current production activities Increasing Productivity & Competitiveness Faster and efficient expansion of product sales to new and emerging markets (geographic & new applications) Expanding & Diversifying Markets Systematically looking at the opportunity to leverage environmental stewardship and unique environmental attributes of forest products Leveraging Environmental Branding Developing and assessing opportunities to develop new fibre based products: e.g. new cellulose, hemicelluloses and lignin material, bio-products Maximizing Fibre Value 5 Canada’s Forest Sector Innovation Hub

6. Sector Transformation Sustainable Forests Commodity Wood Products Commodity Pulps & Papers Building and Living with Wood Engineered Composites & Building Systems Sustainable Construction Appearance Products Specialty Pulps & Papers Modified Fibres ‘Green’ Papers & Packaging Bio-energy & Bioproducts Energy Self Sufficiency Energy Export Bio-products 6 Canada’s Forest Sector Innovation Hub

7. 2009/10 Biopathways Study 1 Sector will continue to be founded on wood products manufacturing New investment returns will come from converting residual wood to new ‘Bioproducts’ Role of wood in building a Green Future 1 By Forest Products Association of Canada and FPInnovations 7 Canada’s Forest Sector Innovation Hub

8. The Fibre Tool Box Specialty Pulp CNF Wood Products NCCPulp Re-engineer for Value Wood Constituents Lignin NFCMCC Sugars 8 Canada’s Forest Sector Innovation Hub

9. FPInnovations Priorities Increasing Productivity & Competitiveness Forest inventory & fibre characterization Forestry operations & fibre delivery Efficient & flexible manufacturing Alternative uses for wood chips Energy efficiency & self-sufficiency Reduced environmental impact Value chain optimization Expanding & Diversifying Markets Market Intelligence Science-based support for current and future market access Building with WoodLiving with Wood Leveraging Environmental Branding Reduced carbon footprint Life-cycle analysis Green building standards Green fibre-based packaging Maximizing Fibre Value Biopathways decision tools Biomaterial and related products Bio-chemicals & bio- fuels Engineered and composite wood products Next generation papers & fibre products 9 Canada’s Forest Sector Innovation Hub

10. An Innovation Hub Canada’s Forest Sector Innovation Hub Collaborative R&D Innovations Implementation, Deployment and Commercialization Needs and Opportunities 10

11. FPInnovations’ University Networks ForValueNet SENTINEL Bioactive Paper Lignowork ArboraNano BL-NCE Innovation Wood Products & Building Systems Biomass Conversion Green Fibre Value Chain Optimization Next Generation Building Systems Next Generation Pulps & Papers Energy and Chemicals From Biomass Novel Bioproducts Laval UBC UQAT UQAM Toronto Queen’s Dalhousie Lakehead McMaster Polytechnique Laval UBC UNB UQAT UNBC UQAM Alberta Toronto Queen’s Lakehead UNB UBC UQAT Carleton Laval Ottawa McGill Ryerson Toronto Waterloo UWO McMaster Polytechnique Dalhousie Toronto Guelph Alberta McGill UQAM UQTR UNB UBC McGill UBC UNB UQTR Alberta Toronto FPInnovations Sherbrooke Alberta McGill UQTR Laval UQAT UBC UWO McGill Ottawa Guelph Queen’s Toronto Lakehead Saint Mary’s Guelph Concordia Queen’s Toronto UBC NSERC/NCE/ CWFC Strategic Networks UNB UBC Laval UQAR Alberta Victoria Toronto Memorial Montreal Nipissing Lakehead Sherbrooke Fibre Centre Canada’s Forest Sector Innovation Hub 11

12. Advisory Processes Three levels of advisory groups: FPInnovations Board Corporate Governance Strategic direction for FPinnovations Provide input to the evolving NFSTS*, based on NRAC recommendations Set high level priorities and KPIs** National Research Advisory Committee (NRAC) Set Future Focus Technologies Program direction and priorities Discuss and make recommendations to the Board re the innovation components in the NFSTS Guide strategic funding allocations Monitor progress of FPInnovations’ research Ensure efficiency and effectiveness of advisory processes Program Advisory Committees (PAC) Focused primarily on operational improvements, best practices and implementation Set research focus areas and priorities to ensure member needs are addressed Review and approve annual research plans and monitor progress * National Forest Sector Transformation Strategy ** Key Performance Indicators 12 Canada’s Forest Sector Innovation Hub

13. Research Program Groupings Resource Supply (CWFC) Other Programs: WFORG PIT Forest Operations Primary WP Manf’g Secondary WP Manf’g Advanced Building Systems Market Pulps Paper & Packaging BioMaterialsBioChem’ls & BioEnergy FPInnovations Collaborative Research Programs Transformative Technologies Inventory and Attributes (CWFC) BioProducts Building & Living with Wood Maximizing Value Provincial Initiatives BC Hem-Fir Initiative Hardwood Initiative CRIBE Sask. Regional Development Member Funded ‘CORE’ Research Reduce Cost & Improve Productivity Reduce Environmental Impact Product / Process Improvement Best Practices Technology Transfer Implementation Assistance Annual Member Service Plans Workshops and Seminars FPI Member Services

14. Concerted R&D 14 Canada’s Forest Sector Innovation Hub Market input early in process Understand customer needs to develop the right new products Build partnerships to accelerate the delivery of new products Capital and production cost known and optimized earlier Alignment of key players New product ideas  Universities  Research labs  Acquired IPs Delivering to customers Engineering analysis / design Market analysis / development End-users Partners Customers FPInnovations in collaboration with industry / governments R&D Concurrent Research and Engineering

15. A Common Language for Innovation 15 Canada’s Forest Sector Innovation Hub

16. Wood is pivotal to a sustainable future 16 Canada’s Forest Sector Innovation Hub

17. 17 www.fpinnovations.ca