2018 International Forest Industries December 2017 January 2018

LOGGING • BIOMASS CONTENTS 44 34 44 FELLING HEADS Better batching, tilting and sawing are on show from two industry greats 34 BIOMASS It’s business as usual for manufacturers of biomass equipment as they push forward with their continuous improvement in tandem with lowering emissions INDUSTRY VOICE John Deere: From a macro-economic standpoint, we are starting to see some economic recovery in the United States and Canada, which is a positive sign. Housing starts are healthy, as are lumber prices. However, there are still several unknowns in the market, including the implementation of tariffs and unexpected events, such as the forest fires that hit northern Canada and the western United States, hurting production. We will have to see how these unknowns impact the logging industry. Looking at other markets, we have seen a lot of stability, especially in Russia and Europe. Additionally, China continues to play a large role in the forestry industry with their importing of pulp and lumber. Q. Cautious Optimism The industry’s finest have once again fed back to International Forest industries on how the sector looks to them, what their clients are asking for, and where they see the opportunities for the immediate future. And it has been a mixed response, as key figures from leading companies offered varied accounts of market strength, while most agreed it was volatile. However, the majority of respondents said they continued to experience growth when able to deliver on demands for innovation Q. How has the macro-economic situation affected your sales? A. Cat: Caterpillar Inc. is benefiting from the strengthening of the global economy. The success of Caterpillar Forest Products is tied to the success of our customers, and their success in turn is tied to the economic health of the overall forest products industry. The improvement in the global economy has favorably impacted the forest products industry in some regions while other regions are still recovering. Barko: We have seen a decrease in some new machine sales mainly due to decreased market demand and a surplus of inventory in the used- equipment market. With the Tier 4 Final engine requirement in all new equipment sold in the US and Canada starting in 2018, some buyers have been hesitant to upgrade and will try to get more out of their older equipment before upgrading. We have also dealt with mild winters in the Great Lakes region the past few years that result in shorter harvesting periods for certain areas of the region. Pulpwood prices continue to remain relatively unchanged, which means producers need higher production to increase profits. Lumber prices seemed to improve and it appears that most of the mills are keeping their yards stocked. Tigercat: The uncertainty created around the 2016 American election, new government and threats A. 30 Respondents to withdraw from numerous trade agreements have played a role in affecting sales as potential customers proceeded cautiously for a few months post the election. The strong demand by Asia for round logs and wood chips has seen countries like Australia, New Zealand and South America increase their exports to mainly China and Japan. Do you feel the forestry sector has been robust in 2017? Cat: Robust may be too strong a word, but the forest products industry has experienced growth in some regions in 2017. However, you have to remember that logging contractors still have their work cut out for them if they want to operate profitably. It is a very challenging business. They take risks, and they make substantial capital investments in equipment. In addition, the prices they get for their products, particularly in the Southeastern U.S., have been near historical lows, which puts further pressure on margins. These businesses are critical to the supply chain of the forest products industry. It all starts with them. They rely on a company like Caterpillar to provide them with the tools they need to do their job and be profitable. And they rely on a dealer network like Caterpillar to provide the ongoing support and assistance they need to keep operating. Caterpillar has a wide portfolio of machines, engines, and services that serve the forestry industry, whether it be building and maintaining roads, logging, managing land, or performing tasks on a mill yard. Barko: The forestry industry in 2017 seemed to improve some when compared to the past few years but it has not recovered as quickly as most had hoped that work within the industry. We look forward to improv ing in 2018 by setting a path for success within our company. Tigercat: When looking at the state of the mining and construction industries and associated equipment suppliers the forestry sector has indeed been the shining light. Bar slight hiccups here and there the forestry sector has been exceptionally robust and in many cases the saving grace for many dealers who operate across the various industries mentioned. John Deere: This year we have seen quite a bit of fluctuation in the forestry sector, as we saw a softening in the industry in the United States and Canada at the beginning of 2017. However, toward the end of the year we have seen positive signs, such as increased mill activity, indicating that the industry is getting stronger. Russia, Europe and South America were relatively healthy throughout the year. Q. Have you seen any changes in your key markets or emerging markets over 2017? A. Cat: We see continued growth opportunities in the emerging markets of the Asia-Pacific region. We think the potential is there for a bright future for the forest products industry. Certainly plantation forest growth and mechanization will contribute to these changes. Caterpillar already has a strong footprint in the region, and we are well positioned to serve the Steve Talaga, product manager for Barko Hydraulics Mario Godbout, Chief Technology and Quality Officer, Autolog Gary Olsen International Sales Manager at Tigercat Inc. Tom Budan, VP Worldwide Forestry Advertisers 2017 include ... Anthony (Tony) Fassino, Director, Caterpillar World Wide Forest Products 56 International Forest Industries | DECEMBER 2017 / JANUARY 2018 International Forest Industries | DECEMBER 2017 / JANUARY 2018 57 52 INDUSTRY VOICE 30 TIGERCAT 58 STEEP SLOPE LOGGING The industry’s finest have once again fed back to International Forest industries on how the sector looks to them, what their clients are asking for, and where they see the opportunities for the immediate future Fourth generation logger, Larry Richards talks about his operations in the Adirondacks and leveraging the knowledge and expertise of the team to capture more value – for the company and the landowners. The landscape for steep- slope logging presents an opportunity for loggers and manufacturers alike LUMBER PROCESSING DECEMBER 2017 / JANUARY 2018 REGULAR FEATURES 6 Logging News CONTENTS 64 Advertising Index COVER: MICROTEC - Goldeneye 900 Transverse Quality Scanner LOGGING • SAW Goldeneye 900 Transverse Quality Scanner for rip, trim, grading and sorting solutions - the only transverse quality scanner that uses X-ray scanning over the whole board length to determine the quality of green, dry or planed lumber – in one pass from all four sides. The scanner detects and localizes all types of knots as well as cracks, discoloration, pitch pockets, wanes, curvature and other dimensional defects. Value optimization before kiln drying, secondary wood processing or remanufacturing are all possible since Goldeneye 900 grades both rough and finished lumber. This allows automating, streamlining and optimizing all further production steps. MILLING • EWP ’s • BIOMASS DECEMBER 2017 / JANUARY 2018 INDUSTRY VOIC E Heavy hitters have their say DRYING TIM FALLING DOW Tree-length cutting powe r N GREASE LIGHTNING World’s faste st sawline goes live? CRUNCH, MUNCH, CHIP Biomass mach ines making wave s www.microtec.eu/Goldeneye900 International Forest Industries | DECEMBER 2017 / JANUARY 2018 1 ES Kiln technolog y to unbottlen eck sawlines TIGERCAT Capturing value in the Adirondac ks MICROTEC Optimizes rip and chop cut at Woodgrain Millwork

2018 International Forest Industries December 2017 January 2018 | Page 3