Slide 1: Canfor Corporation
PAGE 1 Canfor Corporation November 2010 Don Kayne – Vice President, Wood Products Marketing & Sales NAME_2010 C A N F O R C O R P O R A T I O N
Slide 2: Forward Looking Statements
PAGE 2 Forward Looking Statements ► The presentation and answers to questions today contain forward-looking statements which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements
Slide 3: Canfor Operations Locations
PAGE 3 Locations Canfor Operations Sawmills 1 Chetywnd Remanufacture 2 Clear Lake Plywood & OSB 3 Ft. St. John Pulp & Paper 4 Grand Prairie, AB Core Holdings 5 Houston 6 Isle Pierre 15 sawmills in Canada 7 Mackenzie (4.3 BBF) 8 Plateau 4 sawmills in US 9 Polar (0.6 BBF) 10 Prince George 50.2%
Slide 4: Geographic Market Diversification (SPF only)
PAGE 4 Geographic Market Diversification (SPF only) 2010 Estimate 2005 Offshore Offshore 7% 26% Canada 14% US 52% US 79% Canada 22% Offshore Markets Offshore Markets China 16 % China 0.3 % Japan 8% Japan 6% Korea/Other Asia 2% Korea/Other Asia 0.7 % NAME_2010 C A N F O R C O R P O R A T I O N
Slide 5: Product Offerings
PAGE 5 Product Offerings Offshore Home Centre Construction Reman Premium Grade Grade Grade NAME_2010 C A N F O R C O R P O R A T I O N
Slide 6: Projected Reduction in British Columbia Harvest Levels
PAGE 6 Projected Reduction in British Columbia Harvest Levels AAC Potential Sawlog Availabiity Million m³ 75 70 65 60 55 50 45 40 35 30 Historic 2010 2012 2014 2016 2018 2020 2022 2024 Source: BC Ministry of Forests. Wood Market – March 2010 British Columbia Eastern Canada • Reduction in sawlog avai
Slide 7: US Softwood Lumber Demand
PAGE 7 US Softwood Lumber Demand Volumes (Billion BF) 70 64 BBF US Demand Imports from Canada 60 50 40 31 BBF 30 22 BBF 20 10 8 BBF 0 2005 2006 2007 2008 2009 2010 Est. Source: WWPA NAME_2010 C A N F O R C O R P O R A T I O N
Slide 8: Total Canadian Shipments
PAGE 8 Total Canadian Shipments Volume Shipments (BBF) & Each Market's Share of Total SPF Shipments (%) BBF 20 18.7 (61%) BBF 15.2(68%) USA 16 BBF 11.2 (36%) 12 BBF Canada 8.9 BBF Canada (45%) 8 6.1 (27%) USA BBF 8.5 BBF (43%) 4 1.0 (5%) 0.9 (3%) Offshore 2.4 BBF BBF BBF (12%) 0 1997 1998 1999 2000
Slide 9: U.S. Foreclosure Rates - % Change from 2005 to 2009
PAGE 9 U.S. Foreclosure Rates - % Change from 2005 to 2009 In Sept 2010, 1 in 371 housing units had received a foreclosure filing & 1 in 4 homes had negative equity 5th MI 1 in 208 1st NV 1 in 69 4th CA 1 in 178 3rd AZ 1 in 159 2nd FL 1 in 148 = 1st Quartile (Best) Note: = 2nd Quartile Rankings Show
Slide 10: U.S. Housing Starts Projections to 2014
PAGE 10 U.S. Housing Starts Projections to 2014 2,068 Expecting a modest recovery in Single Family 1,350 Forecast 590 Source: US Census Bureau, Woodbridge & Associates NAME_2010 C A N F O R C O R P O R A T I O N
Slide 11: US Softwood Lumber Demand
PAGE 11 US Softwood Lumber Demand Demand will be driven by Residential R&R and New Home Construction 20.5 BBF 20.4 BBF 27.6 BBF 15.5 BBF Source: RISI, Woodbridge & Associates NAME_2010 C A N F O R C O R P O R A T I O N
Slide 12: Canada's Softwood Lumber Shipments to Asia
PAGE 12 Canada’s Softwood Lumber Shipments to Asia 4000 Korea, Other Asia 3.6 BBF China Japan 2.9 BBF 3000 Million Board Feet 2000 1.8 BBF China 1000 Japan 0 1993 1996 1999 2002 2005 2008 2009 2010f Source: COFI, StatsCan, Woodbridge & Associates NAME_2010 C A N F O R C O R P O R A T I O N
Slide 13: China – Macro Picture
PAGE 13 China – Macro Picture •World’s 2nd largest economy •GDP is projected to grow 92% by 2015 •China, Japan, Korea, & Taiwan forecast GDP US$ 17.6 Trillion by 2015 (equivalent of another Japan) •Canada is now the largest wood exporter to China (32% market share) •7 million housing units per year
Slide 14: China – Opportunities
PAGE 14 China – Opportunities • Affordable high density multi-story hybrid dwellings • Residential • Commercial • Public buildings • 6 story & under • Interior / exterior in-fill • Roofs • 7 – 18 story • Interior in-fill walls • Low-density wood frame dwellings • Villas / 2-3 story townhomes • Singl
Slide 15: Lumber Prices – "China Effect"
PAGE 15 Lumber Prices – “China Effect” 2x4 RL #2 & Better Net FOB Mill U.S. SF Starts US$ per MFBM # Units 400 2000 350 Price vs. Starts "Disconnect" Evident from Q2 2007 Onwards 300 SPF Lumber Price 1500 Evidence 250 of "China Effect" on SPF 3rd Quartile & 200 2nd Quartile U.S. Housing Stimulus & 1
Slide 16: China – Dominant Consumer of Commodities
PAGE 16 China – Dominant Consumer of Commodities Global ranking 2006 vs 2000 Lumber Source: WBMS, Barlow Jonker, IEA, PB / USGS/Canfor NAME_2010 C A N F O R C O R P O R A T I O N
Slide 17: Optimistic about the future
PAGE 17 Optimistic about the future U.S. lumber market will recover Continued growth in Asia Constraints facing global fibre supply Supply/demand imbalance points to improved global lumber prices NAME_2010 C A N F O R C O R P O R A T I O N
Slide 18: These materials have been prepared by Management of the Company. No regulatory authority has
PAGE 18 These materials have been prepared by Management of the Company. No regulatory authority has approved or disapproved of the contents of these materials. These materials do not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company, and shall not cons