Our name is innOvatiOn
AnnuAl RepoRt
20092010
FPInnovatIonsannual RePoRt 2009 / 2010
2
Table of conTenTs04_ Message from the Chairman and the CEO08_ Review of activities24_ Financial review25_Message from the Chief Financial Officer26_Financial results Corporate results Results by sector28_ Membership information29_List of members32_Researchadvisorysteering committees34_ Corporate information
innOvatiOnis the new name Of the game.
It Also hAppens to be ouRs.
FPInnovatIonsannual RePoRt 2009 / 2010
3
Over the last two decades, the transformation of the world economy and the globalization of trade have changed the lay of the land for manufacturing companies in the developed countries.
It is now a fact that their competitiveness depends on their ability to address needs that consumers feel are so important that they will pay a premium for the solutions that help meet them. In other words, their success is contingent upon their capacity to design a new value proposition for the consumer.
Locate the real consumer. Build a consistent value proposition. Deliver it more quickly, more efficiently and with greater impact than the competition. Start all over again. These are the new rules of the game: maximize the value for consumers and, consequently, for other stakeholders.
Those are the rules, and the game is called innovation.Conventional industries have already begun adapting to the shift
in the value chain away from the producer and towards the new consumer. It is a challenge that demands not only individual effort on the part of each company, but also a collective effort to seek innovative solutions to common problems.
To face that challenge, the Canadian forest industry has created a model that has no equivalent in the world: FPInnovations.
FPInnovations is the result of a joint effort on the part of industry and the federal and provincial governments. Its mission is to help the Canadian forest industry improve its value chain by developing new products based on the unique attributes of Canada’s forest resources and with a sustainable development approach.
To achieve that mission, we have built our entire innovation strategy around four flagship programs:
• Next-generation building and living solutionsWe are developing revolutionary new construction systems and working to change building codes to promote the use of wood in market segments where it is underutilized.
• Next-generation pulp and paper We are working with paper companies to develop pulps and papers with unique properties for use in new applications with a lesser environmental impact.
• Energy and chemicals from biomass We are developing new materials, new fuels and new energy- efficient solutions that will replace fossil fuels with materials based on a renewable resource with a small carbon footprint.
• Novel bioproducts We are working to create new wood fibre-based products with such remarkable properties that they could revolutionize numerous commercial applications in a variety of markets.
The projects launched under these programs are part of the Transformative Technologies Program (TTP), funded by Natural Resources Canada (Canadian Forest Service). Under the TTP, FPInnovations brings together governments, industry and academia to conduct research focused along the entire forest value chain to develop and adapt emerging and breakthrough technologies that could change the face of the forest industry and, by extension, part of the Canadian economy.
Concurrently, FPInnovations continues to widen and enrich its relationships with provincial departments. Collaborative support and funding from provincial governments are helping FPInnovations spearhead programs such as the BC Coastal Forest Sector Hem-Fir Initiative and revisions to Québec’s forest law regarding plantation site preparation.
FPInnovations is continuously gaining international respect for its research and discoveries, and its unique process of innovation is attracting interest across Canada and around the world.
Because innovation is the new name of the game.ANd our NAmE Is INNovATIoN.
innOvatiOnis the new name Of the game.
message frOm the Chairman and the President and Chief exeCutive OffiCer_
FPInnovatIonsannual RePoRt 2009 / 2010
5 message FRom the ChaIRman and the Ceo_
BringingcompetitivenessbacktoasustainablelevelremainsasizeablechallengefortheCanadianforestindustry.Whilethepulpsectorhasseensignificant improvement, the same cannot be said for all sectors of theindustry,whichcontinuetofeeltherepercussionsofastrugglingeconomy(intheU.S.paperandconstructionmarkets,inparticular),theregulatorytighteningofrecentyearsandrelentlesscompetitionfromemergingecon-omies.Profitmarginsremainunderpressure,andtheindustryhastomakesome toughchoices toprotect its reinvestment capacity and improve itschancesforemergingfromthecrisiswithnewcompetitiveadvantages.Formanyintheforestindustry,thenexttwoorthreeyearswillbebothdifficultandcritical.
FPInnovations, itself a creation of various forest industry stakeholdersinCanada, isobviouslynot immune to thesituation.Over the last12 to18months,wehavebeenforcedtoquestionourselvesaboutourrole,ourprioritiesandthenatureofourcontributiontotheCanadianforestindustry,whichfacessuchenormousproblems.
Theverysignificantdeclineinmembershiprevenues–from$30millionto$9million–obviouslynecessitatedsustainedefforttoensurefederalandprovincial financing for our activities.We also had to renegotiate agree-mentswithourmembersthataremoreinlinewiththeirfinancialpositionandimmediateimperatives,yetstillmeettheindustry-wideneedforfirst-rateR&Dservicesthatwillallowmemberstomeettheirshort-andlong-termchallenges.
Most importantly, however, the situation sparked awealth of positivereflectiononouroperatingmodel,ourcontributiontothetransformationoftheCanadianforestindustry,and,byextension,theCanadianeconomyasawhole.Obviously,theveryhighlevelofintegrationinCanada’sforestindustryputsFPInnovationsinapositionthatisalmostuniqueintheworld:it is one of the rare organizations of its kind with the power to play aroleinitscountry’sentireforestproductvaluechain.Inaddition,thefibreextractedfromthedifferenttypesoftreesthatgrowinCanadahasuniquecharacteristics,making it possible to develop applications thatwouldbeunthinkableusingexoticspecies.Theseareimportantcompetitiveadvan-tages when formulating solutions for our members and developing newapproachesandproducts.
In2009–2010,FPInnovations,notunliketheCanadianforestindustryitselfinthepastdecade,wentthroughastrategicrealignmentdesignedtoidentifyitscorecompetitiveadvantagesanddevelopaplanfocusingonflagship,high-value-addedprograms.Theseprogramsaresopromisingthattheyarealreadyattractinginterestacrosstheindustry–andwellbeyond.
designing a new value PrOPOsitiOn foR the foRest sectoR _ And beyond.
inn
Ov
at
iOn
Pierre Lapointe President and Chief executive officerJim Lopez Chairman of the Board
FPInnovatIonsannual RePoRt 2009 / 2010
7 message FRom the ChaIRman and the Ceo_
WhatisevenmorestrikingaboutFPInnovationsisitspositioninwhatwecancalltheinnovationuniverse.Itisafactthat,whilethereisnoshortageofgoodideasinthebusinessworld,trueinnovationisrare.Innovationisnotaproduct;itisacomplexprocessthatmakesitpossibletodelivernewvaluebyusingresearchtodiscover,createandimplementnewproducts,newprocesses,newtechnicalmeansandnewservices.Feworganizationshave the structure, the networks, the partnerships, the know-how, thepersonnel, the integrative capacity and themarket intelligence todeploythatdynamiconanongoingbasis.FPInnovationsisoneofthem.
Inthisregard,theestablishmentofajoint-venturecompanywithDomtarto build and operate a commercial-scale nanocrystalline cellulose (NCC)demonstrationplantismosttelling.Bringingresearchteams,engineersandmarketintelligencespecialiststogetherinthesameprocesshasallowedustorealignourprioritiesandpositiontheprojectinrealtime.Thisintegra-tionofresourcesallowedustosignificantlyreducethetimeandinvestmentneededtobringtheprojecttocompletion,inspiteoftheveryhighleveloftechnologicalcomplexityinvolved–anachievementheretoforeunimagin-ableformostexpertsinthefield.Itisnoexaggerationtosaythatwetooktheworldbysurprisewiththeannouncement.Inaway,wehavebroughtourselves into theworld.Wehavemadeaname forourselves.And thatnameisinnovation.
TheNCCprojectisjustoneamongmanyothersonwhichourteamsaredemonstratingthisuniquecapacityforinnovation.Aspartofourstrategicplan, we are taking on four flagship programs: next-generation buildingandlivingsolutions;next-generationpulpsandpapers;energyandchem-icalsfrombiomass;andnovelbioproducts.
These flagship programs open up promising and ambitious areas ofresearchthatwillhelptheCanadianforestindustryrepositionitselfattheheart of a new bioeconomy. This research focuses on high-value-addedapplicationsbasedonarenewableresource–wood–whichhasasmallcarbon footprint and can be sustainably utilized. These are also areaswhere ourmembers can foresee becomingmore globally competitive inmanymorewaysthanthroughacostreductionstrategyalone.Thisisourmessagetotheindustry:wewillbethereintheshorttermtohelpyougetthrough thecomingyearswith innovativesolutions,andwewill alsobethereinthelongtermtohelpyougettothenextlevelwithsolutionsthatwillbringnewandever-increasingvaluetothemarket.
AsyouwillseeintheReviewofactivities,oureffortshaveprovedfruitfulonanumberofprojectsthroughouttheyear.Theseincludetheconstruc-tionof thenewFondactionheadoffice inQuébecCity, anon-residentialsix-storeybuildingbuiltprimarilyofwood;theproductionofbiomethanefromwoodpulpresidue;and,amongmanyotherprojects,theimprovementof forest-related transportation by increasing logging truck loads, whichinvolves a new system that could eventually be commercialized in othersectorsofthetransportationindustry.Weinviteyoutoreadaboutalltheseprojectsandseehowouractivitiesaretranslatingintoapplicationsthatarehelping Canada’s forest industry companies consolidate their position inconventionalmarketswhilealsotakingtheirplaceinnewones.
With theperiodof intensequestioningbehindus,we look forward toafutureofexcitingpossibilitiesforourmembers,personnelandpartners.OnbehalfofthemanagementteamandtheBoardofDirectors,wewouldlike to thank everyone for their support over the last year and the trusttheycontinuetoplaceinFPInnovations.Morethanever,management,theBoard and all FPInnovations personnel are speaking with one voice andworkingtowardsthesameobjective:toplanttheforestindustrysolidlyintheeconomyofthe21stcentury.
Wecanbeproudofwhatwehaveaccomplishedtogether–andwe’reenergizedbythechallengesthatawaitus.
review Of aCtivities
FPInnovatIonsannual RePoRt 2009 / 2010
9RevIew oF aCtIvItIes_
Cellulose at the nanocrystalline level.
Tiny parTicles, big possibiliTiesNanocrystalline cellulose (NCC), a wood-based nanomaterial that is
abundant,renewableandrecyclable, isoneof themostexcitingareasofwoodfibreR&D.Thepossibilitiesforthisinnovativeproductgofarbeyondtraditionalpulpandpaperapplications.
Formorethan15years,FPInnovationshasbeendevelopinganextensiveintellectual propertyportfolio aroundNCC, includingbothmanufacturingandapplications.NowFPInnovationsandDomtarCorporationhaveformedajointventuretobuildthefirstNCCdemonstrationplantintheworldonthesiteofDomtar’spulpandpapermillinWindsor,Québec.Thegovern-mentsofCanadaandQuébecarebothprovidingfinancialsupportforthis$40.8millionproject,whichwillcreateabout50jobsduringtheconstruc-tionphaseandabout10permanentpositionsoncetheplantisoperational.
ThedemonstrationplantwillproduceonemetrictonperdayofNCCbymillingandhydrolyzingwoodcellulose,thenseparatingandconcentratingthenanocrystallinecelluloseparticles.Chemicaltreatmentscancustomize
theNCC formany different uses. The huge commercial potential of thissustainableandbiodegradablematerialstemsfromthewiderangeofprom-isingapplicationsintheautomotive,aerospace,chemical,textile,forestryandmanyotherindustries.
NCC’suniqueoptical,electrical,magneticandstrengthpropertiesgiveitalmostlimitlesspotentialforuseinmanytypesofcommercialproducts,including high-durability paints and optically reflective films; improvedpaper, packaging and building products; advanced composite materials;andeveninnovativebioplasticsforbonereplacementandtoothrepair.
finding sOlutiOns.OPening uP new markets. embarking On an exCiting future. A summARy of ouR R&d pRojects In 2009–2010.
FPInnovatIonsannual RePoRt 2009 / 2010
10
1 wooden furniture and accents like these can help reduce stress and promote health.
2 wood is an integral part of the structure of the new six-storey Csn Fondaction building in Québec City.
_RevIew oF aCtIvItIes
subsTanTial progress on The hardwood iniTiaTive The Hardwood Initiative – Increasing the Profitability of the Eastern
Hardwood Industrywasdevelopedwith theCanadianWoodFibreCentre(CWFC).Twelveprojectshavebeenstartedaspartofthisinitiative,fourofwhichwerecompletedinsummer2010.
Asignificantamountofresearchhasbeenaccomplishedinthepastyear,includingthefollowing:
• A lifecycleanalysisofcertainhardwoodproducts isunderway toevaluatetheirenvironmentalimpact.
• An analysis of secondary and tertiary transformation has beencompleted,andneedsarenowbeing linkedwithsawmillproducts(preliminaryresultsshowsignificantimprovementinafewsectors).
• Trialsfortheuseofbiotechnologyincolorationanddiscolorationareinprogress,andinitialresultsareverypromising.
• TrialshavebeenconductedinOntario,QuébecandNewBrunswicktoproposenewharvestmethodsadaptedtolocalforests,theresultsofwhicharecurrentlybeingtestedandanalyzed.
• TrialshavebeenconductedinNewBrunswicktoevaluatethecapabilityofLiDARtechnology(seep.19)toimproveknowledgeofhardwoodforestsandtheimpactofpartialharvestingontreegradeprojection.
This research initiative is among the most important ever devoted tothehardwoodforest.ThefactthatseveralEasternCanadianprovincesareinvolved, the significant number of researchers participating from eachcontributing province and the contribution of universities conductingresearchonhardwoodsmakethisatrulyexceptionalundertaking.
bc coasTal iniTiaTiveThe BC Coastal Forest Sector Hem-Fir Initiative is a partnership with
the coastal forest industry and theBritishColumbia and Federal govern-mentstofindinnovativewaystoincreasetheefficiencyanddiversityofthewesternhemlockandamabilisfirprocessingsector.Theoverallobjectiveof thisfive-year initiative is todevelopnewproductsmanufactured fromthecoastalhem-firresourceorimprovethecharacteristicsofexistingones.
IntheInitiative’sthirdcalendaryear,workcontinuedonidentifyingandassessing opportunities along the value chain. Focus is shifting towardsmedium-andlong-termtargets,withsignificantprogressinareassuchasscaling, sawmilling, chip supply and supply chain.Therehavealsobeennotableachievementsintransportandproductdevelopment.
In theareaofhighway soundabatement fencing, for example, anew“hybrid” (wood and concrete) demoproduct is being testedwith a viewto regainingamarket thatwasonceheldbywood,buthasmigrated toconcreteandsteel.Thisinitiativewillprovideanew,highervalueend-useforalowvalue,fall-downlumbergradefromacommonpostproduct.
In addition, researchers are working on bio-energy opportunities bystudying the complex integration of available technologies with respecttospecificresources,technologicalviabilityandkeychallengesforemer-gingproducts or processes. Three emerging technologies – torrefaction,pyrolysisandgasification–showgoodpotential,witheachyieldinguniqueenergy products. In the coming year, opportunities for making use ofcoastalbiomasswillbepursuedatbothindustrialandcommunitylevels.
Otherprojectsincludetestingreducedsawplatewidthsindouble-arborgang saws, developing innovative scaling methods and determining theeffectofloglengthonaverageandmaximumpayloads.
FPInnovatIonsannual RePoRt 2009 / 2010
11RevIew oF aCtIvItIes_
effecTs of wood in The builT environmenTThebenefitsofwoodandwoodproductsaremany,andnowthere is
growingevidencethatit’stimetoadd“humanhealth”tothelist.Researchonwoodandhumanhealth,performedattheUniversityofBritishColumbiabyanFPInnovations researcher forhisdoctoral thesis, shows thatwoodactually reduces stress and promotes health in the built environment.Amongotherfindings,exposuretooutdoornaturalenvironmentshasbeenshownto lowerbloodpressure,heartrateandskinconductance;reducethe frequency of common colds and flu and accelerate recovery fromillness; lowerpainperception;and increasetheability to focusattention.ThestudiesconductedatUBCshowedthattheapplicationofwoodinthebuiltenvironmentreducedsympatheticnervoussystemactivation,orstressresponse. This result indicates that wood could be used to bring someofthehealthbenefitsofnatureindoors,whichiswhereCanadiansspend88%oftheirtime.
Using the scientific approach to establishhealth as anewattributeofwoodsupportsevidence-baseddesign(EBD),whichisviewedbytheDesignFuturesCouncilasoneofthetoparchitecturaltrendsforthenewdecade.
wood use sTraTegyFPInnovationsissupportingtheWoodUseStrategyforConstructionin
Québec,underwhich theprovincial andmunicipalgovernments, aswellasotherorganizations,suchas labourunions,are leadingbyexampletoincrease the demand for wood in non-residential construction. The newCSNFondactionofficebuildinginQuébecCityistheperfectillustrationofthis. InauguratedonMay11,2010, thesix-storey,glue-laminatedstruc-turewithaconcretecoreisoneofthetallestofitskindinNorthAmerica.This remarkable achievement is the product of scientific research byFPInnovationsanditspartners–researchthatpavedthewayforwoodtobe used in commercial buildingswhere, previously, only othermaterialsmet themultiple technologicalandregulatoryrequirements.Theresult isawholenewbuildingparadigminwhichwoodnotonlypresentsasetofpropertiesequivalenttothoseofothermaterials,butalsocontributesnewcharacteristics and verydistinct advantages. FPInnovations alsoprovidedtechnicalassistanceforthedesignofthismulti-storey,heavy-framehybridbuilding, which was awarded two Prix d’excellence, including one forstructuraldesign,byCecobois, theCentred’expertisesur laconstructioncommercialeenboisinvolvedinthepromotionofwooduseinnon-residen-tialconstructioninQuébec.Thewoodusedinthebuildingstructuremaxi-mizestheperformanceofthewholelogrightuptothetips,apartofthetreethatusedtobeleftinthefellingarea.ThebuildingwasalsodesignedtoachieveLEED™certification.
1
2
FPInnovatIonsannual RePoRt 2009 / 2010
12_RevIew oF aCtIvItIes
“wood firsT” awardInFebruary2010,theHonorablePatBell,B.C.’sMinisterofForestsand
Range,presentedFPInnovationswitha“WoodFirstChampion”awardforitscontributionofstaff,expertiseand innovation to thesix-storeywood-frame construction project. The organization’s input was critical in theprocessthatledtochangesintheB.C.BuildingCode,implementedinApril2009, which increased the maximum height for wood-frame residentialconstructionfromfourtosixstoreys.TheB.C.BuildingCodeisthefirstinNorthAmericatoallowsix-storeywoodbuildings.
FPInnovations’ activities included advanced computer modeling ofbuildingperformancetoassessseismicbehaviour,theprovisionofadetaileddesignexampleofasix-storeywood-framebuilding,andparticipation inthe design and performance assessment of a full-scale, six-storey woodplatform-framebuilding.ThebuildingfeaturedNorthAmericandesignsandmaterials,andafterconstruction,itwastestedontheworld’slargestshaketable in Miki City, Japan. The test building also featured the MIDPLY™wall system thatwasdevelopedby researchersatFPInnovationsand theUniversityofBritishColumbia.Whensubjectedtoaveryhigh-magnitudeearthquake, the building performed exceedinglywell, thus providing thenecessaryassurance tobuildingcodespecifiersanddesignersworldwidethatfive-andsix-storeywood-framebuildingscanbebuiltwitheconomicaldesignandconstructionmeasurestowithstandpowerfulearthquakes.
AWoodEnterpriseCoalition,ofwhichFPInnovationsisamember,hasbeenformedinB.C.tosupporttheprovince’s“WoodFirst”initiative,and20five-tosix-storeyprojectsarecurrentlyunderway.
enhanced daTa managemenT for foresT operaTions
FPDat™,anewdata loggingsystem, is improving theway that infor-mationismanagedinforestoperations.Inalimitednumberofprototypeinstallations in 2009, the FPDat data logger has proved itself to be aconsiderableimprovement,receivingextremelypositivefeedback.
The new-generation version of the eight-year-old MultiDAT® system,FPDatisanenhancedsolutiontotheage-olddatamanagementproblemsendemictoforestoperations.Theseincludethewidevarietyofequipmentbeing used, the remoteness of work sites and associated challenges tocommunications,aswell as theoverall complexityofcapturing informa-tion.Despitetheseissues,all themembersoftheforestoperationschain–fromequipmentoperatorstoforestcontractors,productionsupervisorsandcompanymanagement–needaccesstoasteadystreamofaccurate,real-timeproductiondata.
UnlikeMultiDAT,FPDathasafullyinteractivesystemthatincludesGPS,real-time updates of key performance indicators, message receiving andsending capability and data input screens for individual machine types.Forexample, ina forwarderoraskidderconfiguration, theoperatorwillbeable to recordanestimateofvolumebrought to roadsidebyproducttype, which will provide useful information both to him in terms of hisproductionlevels,andtothesupervisorregardingroadsideinventorylevels.FPDat configurations will be available for all forest machine types,includingfelling,extractionandprocessingequipment.
Thesystemrolloutwillcontinuewithmoreinstallationsin2010-2011,andanintegratedFPDatunitsetforcommercializationinearly2011.
1
2
FPInnovatIonsannual RePoRt 2009 / 2010
13
1 l-R: steven Kuan, Building and safety standards Branch, B.C. ministry of housing and social development; erol Karacabeyli, manager, FPInnovations wood Products division; Russ Kinghorn, association of Professional engineers and geoscientists of British Columbia; and Pat Bell, B.C. minister of Forests and Range.
2 the new interactive FPdat data management system is providing accurate, useful information and will soon be available on all forest machine types.
3 site preparation costs in Québec are now being reimbursed more fairly, thanks to FPInnovations research.
RevIew oF aCtIvItIes_
a level playing field for siTe preparaTion work in Québec
Findings released by FPInnovations after an intensive, two-year studyhaveledtochangesinthereimbursementratesforsitepreparationtreat-ments under Québec forest law. This study was the result of long-heldconcernsbyforestmanagersandcontractorsthatthepriorreimbursementmodel–whichofferedafixedratepertypeofmachineused,withouttakingoperating,productivityorregionalvariationsintoaccount–wasn’tasfairasitshouldbe.
More than 50,000 hectares of public land are prepared annually inQuébec for the planting of seedlings, and the increasingly remote anddiverseconditionsofthetreatmentsitesexacerbatedtheinequityofafixed-ratemodel.Togaugetheseriousnessoftheproblem,FPInnovationsstudied26,000 hectares of land treated by various site preparation equipment(73machines)in10differentregionsoftheprovince.FundedbyQuébec’sMinistryofNaturalResourcesandWildlifeandNaturalResourcesCanada(NRCan), these research studieshave led to revised reimbursement ratesthattakesiteandoperatingconditionsintoaccount.
This researchalso looked into therelative impactof fuelconsumptiononthe total treatmentcost forsitepreparation,with thefindings leadingto better compensation for contractors’ lost profit due to increasing fuelprices. The research studies have attracted a lot of attention fromotherprovinces, and workshops have already been held in New Brunswick,NewfoundlandandLabrador.
3
FPInnovatIonsannual RePoRt 2009 / 2010
14
improving safeTy on resource roadsInresponsetoconcernsaboutthesafetyofresourceroadsusedinforest
operations, FPInnovations has developed a cost-effective Road SafetyInspectionsystem.Theurgentneedforactioninthisareawasunderlinedina2009reportbyWorkSafeBC:“Resourceroadsarehazardous,high-riskworkplaces with an average of four industrial deaths per year in BritishColumbia.”SupportforthisresearchhasbeenprovidedbytheBCMinistryofForestsandRange,NaturalResourcesCanada,WorkSafeBC,andtheBCForestSafetyCouncil.
The system, using high-precision GPS, mobile videography and LightDetection and Ranging (LiDAR) technology, is mounted on an SUV thatdrivesdowntheresourceroad.TheresultingdataisthenprocessedusinganalysismodulesandsoftwaretoolsthatweredevelopedincollaborationwithTrimbleCanada.Since2008,FPInnovationshastestedthesystemonover300kmofmainlineroadsinB.C.,withrecommendationsfocusingonimprovingdesignspeedandpostedspeedlimits,stoppingsightdistance,geometricdesign,signageandanumberofother featuresaffectingroadusersafety.
TheRoadSafety Inspectionproject reduce thedirectcostof lost timeand production due to worker injuries, but will also greatly lower theindirectcostofresourceroad incidents; the impactof these incidentsonfamiliesandcommunities isestimated tobe four tofive times thedirectcost.ThesafetyinspectionswillbecarriedoutonotherBCTimberSales(BCTS)roadsin2010,withwiderrollouttootherprovincesandindustrialmembersplannedforthefuture.
invesTigaTing biodiesel for foresT operaTions and highway consTrucTion
In partnership with Natural Resources Canada’s National RenewableDieselDemonstrationInitiative,FPInnovationsisconductingademonstra-tion project of biodiesel use in forest operations and highway construc-tion.In2009–2010,biodieselimplementationinitiativeswereheldinfourlocations:ahighwayconstructionsite inCoquitlam,B.C.;asawmillyardoperation in Prince George, B.C.; and forest operations in Merrit, B.C.,andSt-LudgerdeMilot,Québec.Theobjectiveofthedemonstrationswasto better understand the various challenges involved in using renewabledieselinoff-roadoperationsinCanada;thentoidentifythebestmethodstoovercomethesechallenges.
Thedemonstrationprojecthasasignificanttechnicaltransfercomponent,withworkshopsplannedforeveryprovinceinCanada,inwhichtheresultswillbepresentedtotheconstructionandforestrycommunities.Biodieselimplementationguidesforbothconstructionandforestryaresetforpubli-cationin2010,andaWebpageontheFPInnovationsWebsitewillalsopresenttheresultsofthisimportantinvestigationintorenewablediesel.
_RevIew oF aCtIvItIes
1
2
FPInnovatIonsannual RePoRt 2009 / 2010
15
1 the new Road safety Inspection system, seen here mounted on an suv, is expected to greatly reduce the incidence and impact of accidents on resource roads.
2 Biodiesel may well play a significant part in building the highways of tomorrow.
3 new technology is increasing payload capacity, resulting in reduced fuel consumption and considerable cost savings.
promoTing increased payloads for foresTry Trucking
In response to the intensifying need to increase payloads in forestrytrucking operations, FPInnovations is expanding its decades-long workto promote higher payloadswithout compromising safety.Workingwithgovernment agencies, trucking operators and mills, FPInnovations isenablinghigher,moreefficientpayloadsbyconductingrigorousresearch.
Oneavenuebeingpursuedinthisareaistoimplementinnovativetech-nologies to existing platforms, enhancing dynamic stability – which, inturn,allowsforhigherpayloads.Theroll-coupledtrailerhitchisonesuchtechnology,whichFPInnovationshasbeendevelopingforseveralyears.Athree-phasetestingprocess–inwhichthehitch-enabledtruckisfirsttestedincomputersimulations,theninalab,andfinallyontheroad,withcarefulmonitoring–issetforcompletioninsummer2010inB.C.FPInnovationsisalsospearheadingtheintroductionofcompletelynewtruckingconfigura-tionsthatareinherentlymorestable,suchasthe9-AxlePoleB-Train,whichtakesadvantageofthelogsforroll-coupling.
In collaborationwithWestern government agencies, associations, andfleetownersandoperators,FPInnovationshas increasedaveragepayloadcapacityintheWesternprovincesby10%,withanestimatedtypicalfuelconsumption/greenhouse gas reduction of 5% and an estimated annualcost reductionof$1,500,000. The sameprocess that has succeeded inincreasingpayloads inAlberta,SaskatchewanandB.C. iscurrentlybeingappliedintheEast:FPInnovationsisworkingwiththeQuébecgovernmenttobringnewconfigurationstothenorthernpartoftheprovince.
RevIew oF aCtIvItIes_
3
FPInnovatIonsannual RePoRt 2009 / 2010
16
supporTing a greener indusTryGiven the shrinking market for traditional pulp and paper products,
increasingglobalcompetitionandgrowingpublicconcernfortheenviron-ment,FPInnovationsishelpingpositionCanadiancompaniestocapitalizeon new opportunities by ramping up a three-pronged approach to newproductdevelopment.Thisapproachincludesdevelopingcompetitivenext-generationpapersthatwillvieagainstplastics,glassandmetals;collabor-atingwiththeInnovativeGreenWoodFibreProductsNetwork,auniversityresearch network funded by NSERC; and working closely with membercompaniesonshort-termopportunities,focusingonproductsthatcanbebroughttomarketquickly.
Onevalue-addingproductopportunityidentifiedbyFPInnovationsisinflexiblepackaging.Aprototypepaperwithawater-basedbarriercoatinghas been developed and its performance has been improved. Such aproductmay be able to replace the fluorocarbon-treated oil and grease-resistant papers used in food packaging.Not only is it “greener,” it alsoeliminateshealthconcernsandincludesavapourbarrier.Theorganizationiscurrentlyworkingwithmembermillsandpartnersonthisnewproductincertainlimitedapplications,thoughtheeconomicsofthesolutionhavenotyetbeendetermined.Anotherexampleisthedevelopmentofaninkjetprintingpaperbasedon100%mechanicalpulpthatmatchestheperform-anceofanuncoatedfinepaper.FPInnovationshasdesignedanewcoatingrecipe tominimize theadverseeffectofcoarsemechanicalfibreand thehigher cationic chargeof calciumcarbonate-basedcoatings.Usinghigh-yieldmechanicalpulp insteadof low-yieldchemicalpulp tomakedigitalprintingpaperwillcontributetosustainability.
expanding The markeT for high-yield pulpHigh-yieldpulp(HYP)isableachedchemithermomechanicalpulpused
mainly in packaging and printing papers. However, with strong globalcompetitionandthedecliningNorthAmericandemandforprintingpapers,there isanurgentneedtodevelopnewapplications forHYP.Onesectorwithsignificantpotential is sanitarypapers, specifically tissueand towel.High-freenessHYPcanimprovebulkandabsorbency,whicharetwoofthemostimportantend-usepropertiesfortheseproducts.
FPInnovations, inpartnershipwith threemembercompanies andwithfinancialsupportfromtheQuébecMinistryofNaturalResourcesandWild-life,hasperformedaseriesofpilottrialstodemonstratetheadvantagesofusingHYPintissueandtowel,aswellastoidentifywhichHYPpropertiesrequireimprovementandwhichpapermaking/performanceissuesneedtobeaddressed.ThetrialsprovedthatHYPdidincreaseabsorbencyandthatpaperscouldbemadewithanHYPcontentashighas30 to40%.Thebasesheetproducedinthetrialshasbeenconvertedintoproductsamples,whicharenowavailable.
Asaresultofoureffortsinthisarea,tissueandtowelproducersareabletoreducecostsandimproveproductquality,whileHYPmanufacturerscanexpandfurtherintothehygieneproductsmarket.Thatmarkethasshownstronggrowthoverthelastdecadeandthetrendisexpectedtocontinueinthenearfuture.
_RevIew oF aCtIvItIes
1
2
FPInnovatIonsannual RePoRt 2009 / 2010
17
1 more foods may soon be wrapped in greener, safer paper like this, as a result of FPInnovations’ research.
2 this paper machine is turning out sanitary papers containing a higher percentage of high-yield pulp, which will help producers improve product quality and reduce costs.
3 medical drape is one of the specialty materials whose properties FPInnovations is quantifying in its search for new opportunities for Canadian pulp producers.
achieving beTTer performanceWiththedemandforprintingandwritingpapersdeclining,theCanadian
pulp and paper industrymust improve its performance to stay competi-tive.FPInnovationsisprovidingsupportinthatprocessbydevelopingnewproduct characterization tools to help mills boost product performance.Ouruniquefacilitiesandexpertiseinwebandrolltesting,printingevalua-tionandmicroscopicanalysisareinhighdemandfordiagnosingproductperformanceproblemsanddevelopingsolutions.
A growing number of mills are implementing FPInnovations’ productcharacterizationtoolsforpressroomrunnabilityandcoatedpaperquality,leading them to identify efficiency opportunities and develop effectivestrategies for enhancingproductperformance. Inone case,COATLAB™,a coating formulation softwarewedeveloped,wasused tohelpTembecPaperboard Group’s coated board mill improve its coating formulationto maximize the performance of the optical brightening agent (OBA).FPInnovationsprovidedtechnicalsupporttoconductthemilltrials,developcoatingstrategiesandvalidatetheCOATLAB™prediction,andanadvancedfluorescencemicroscopewasusedtogaininsightintohowOBAinteractswithbasepapers.Asa result, themill isnowpositioned to improve thecompetitivenessofitsproductsandevenlaunchnewproductstomeetthemarketdemand.
helping pulp producers explore new opporTuniTies
Toensuretheindustry’slong-termsuccess,newopportunitiesmustbefound for Canadian market pulps. Applications have to be developed toencompassawiderangeofproducts,particularlythosewithpotentialforhigher value, such as specialty papers – a key market for pulp produ-cers.DiversifiedCanadianmarketpulpscertainlysatisfytherequirementsofmanydifferent products.However,more information is needed aboutthestructuralandfunctionalroleofthefibrecomponentoftheseproducts,aswellastheuniqueadvantagesofourpulpsforspecificapplications.Todate,suchinformationhasbeenscarce.
FPInnovations is making progress in this field by using its advancedconfocal/two-photon microscope to generate high-quality images of awide range of specialty products, including cigarette filter plugs, trans-formerboards, crepepaper,medicaldrapeandgowns,filters and satur-atingpapers.Usingimageanalysis,manystructuralandqualityparameters,suchasporosity,canbereadilyquantifiedindetail,includingdistributionwithinthesheetandmeasurements,layerbylayer,whichcannotbeeasilydeterminedbyothertechniques.Thisworkisanimportantstepinidenti-fyingboththestructuralandfunctionalrolesoffibrecomponents,andtherequirementsoffibrequalityforspecialtypaperproducts,whichwouldleadtonewopportunitiesforCanadianmarketpulps.
RevIew oF aCtIvItIes_
3
FPInnovatIonsannual RePoRt 2009 / 2010
18_RevIew oF aCtIvItIes
1 the pulp pad on the right has been modified using a new process to improve moisture resistance.
2 lidaR-predicted gross merchantable volume for the 625,000 ha Romeo malette Forest.
3 400 m2 prediction units.
moisTure-resisTanT pulpsScientists at FPInnovations have developed a new process for produ-
cinghydrophobicmechanicalandchemicalwoodpulpfibres.Theprocess,which could be implemented in most kraft or mechanical pulp mills,uses a unique aqueous approach to modify wood fibres, whereby thefibres retain theiroriginal shapebutbecomeenvelopedwithamoisture-resistantpolymer.
Improvingmoistureresistanceisacriticalfactorinimprovingthemarketopportunities for wood fibres. Pulp manufacturers can use the processto produce a new grade of pulp for use in niche markets for specialtypapers and wood products that require high dimensional stability andbettermoistureresistance.Manufacturersofcompositeswillbeabletousewoodfibres–whicharelighter,lessexpensiveand“greener”thanpolymerormineralfibres–toproducelightweightmaterialsfortheautomotiveandbuildingproductsindustries.
Tool for predicTing and comparing The performance of sofTwood markeT pulps
Inordertomaximizepulpvalueandapplicationsfocusingontheattrib-utes of Canadian northern bleached softwood kraft (NBSK) pulps, theindustryneedseffectivenewtools.FPInnovationshasdevelopedsoftwaretoolsbasedonmultivariatemodeling,whichprovidequickestimatesofthephysical andoptical properties of refined softwoodkraft pulp from theirunrefinedfibremorphologyanddegreeofrefining.Thesetools,whicharenowavailabletoourmembercompanies,canquantitativelycomparethefibreandpulppropertiesofaparticularuser’spulpagainstacomprehensivesetofworldmarketpulps.Thismeansthatmarketpulpproducerscanusethetoolstoguidethemincustom-tailoringtheirpulpsforspecificcustomerrequirements,whiletechnicalsalesstaffcanusethemtodemonstratethesuperiorperformanceof theirpulpsover those fromcompetitive regionssuchasScandinaviaorChile.Anotherapplicationispredictingtheimpactofachangingfibresupplyonpulpperformance.
1
FPInnovatIonsannual RePoRt 2009 / 2010
19
2
RevIew oF aCtIvItIes_
Theso-called“sidebenefits”ofLiDARareequallysignificant.Accuratedigitalelevationandsurfacemodels(DEMandDSM)optimizeblockdesign,roadlocation,riparianzonedefinitionandthemitigationofenvironmentaleffectsassociatedwithforestoperations.Infact,TembecestimatesthatthesavingsinroadconstructionaloneeasilyoffsetthecostoftheLiDAR.airborne lidar produces impressive resulTs
In their ongoing quest to develop new forest inventory tools, theCanadianWoodFibreCentre (CWFC)and theOntarioMinistryofNaturalResources(OMNR)havefoundenormouspotentialinLiDAR(LightDetec-tionandRanging).LiDARisanairbornemappingtechniquethathasbeenshown to produce remarkably accurate forest inventory data and digitalelevationmodelsthathavemultiplebenefitsfortheindustry.
Tembecwasoneof thefirst touse this technology toacquirea largeamount of inventory data, including tree height, tree diameter and treevolume,whenlow-densityLiDARwasflownoveritsRomeoMaletteForestin Ontario. With support from a CWFC-OMNR partnership, low-densityLiDARwasusedtobuildpredictivemodelsfortheentire625,000hectares.Tembecwasveryimpressedwhenactualharvestvolumescloselymatchedthepredictions.“OurinitialcomparisonofLiDAR-derivedblocklevelvolumeestimates is astounding,” said Chad St-Amand, GIS Analyst and ForestInformationServicesCoordinatorwithTembec.“ItappearsthattheLiDAR-estimated volumes per block are within 10% of what we realized fromscaling.”Diameterdistributionresultswerealsoexcellent,openingthedoortosuchpotentialusesasdeterminingharvestrates,marketrequirements(sawlogs vs. pulp), allocation selection during FMP planning, budgetingandmilldemands.AnewLiDAR-basedinventoryofTembec’s1.5-millionhectareHearstForestiscurrentlyinprogress.
3
FPInnovatIonsannual RePoRt 2009 / 2010
20_RevIew oF aCtIvItIes
1 members of the partners collaborating on the fibre research project in newfoundland and labrador.
2 Research assistant olivier van lier uses ground-based lidaR (light detection and Ranging) to capture scans of sample trees at forest inventory plots.
3 the 8-year-old short-rotation development site in edmonton.
collaboraTive fibre research in newfoundland and labrador
InNewfoundlandandLabrador, scientists are exploringnovelways tounderstand forest ecosystems. Because not all fibre is created equal, itis important for land managers and especially for industry to determinehow fibre varies over the landscape. This challenge is being addressedby a collaborative research team involving FPInnovations, the CanadianForestServiceofNaturalResourcesCanada,SirWilfredGrenfellCollegeofMemorialUniversity,theUniversityofSherbrooke,CornerBrookPulpandPaper,theNewfoundlandDepartmentofNaturalResourcesandtheAppliedGeomaticsResearchGroup.Theresearchteamisusingadvancedlaserandimagingtechnologiestomapthestructureofforeststandsandcanopies.Byrelatingthe3Dstructuretotheinternalfibrecharacteristicsoftrees,scien-tistsarehopingtolearnmoreaboutthetypeoffibreintheforests,wherethebestsitesareforfibrewithspecificcharacteristics,andhowindustrymightincreasetheuseofthatfibre.
“Agoodunderstandingofthefibrecharacteristicsofourforestresourceiskeytoallocatingtimbertoitsbestenduse.Itwillalsobeinstrumentalinfutureharvestplanningandhowwoodissortedatthestumpfordifferentproducts,” notes Tim Moulton, Silviculture and Continuous ImprovementSuperintendentatCornerBrookPulpandPaperLimited.
1
2
FPInnovatIonsannual RePoRt 2009 / 2010
21RevIew oF aCtIvItIes_
norway spruce projecT shows Tangible resulTsFast-growing, weevil-resistant Norway spruce varieties with excel-
lentformareapromisingresultofalong-termcollaborationbetweentheCanadianWoodFibreCentre(CWFC)andJ.D.Irving,Limited.AsanactivememberoftheCWFC’sNationalNetworkofSomaticEmbryogenesisLabora-tories,J.D.Irvinghasbeenfocussingontheoperationalrefinementofthesomatic embryogenesis (SE) technologydeveloped inpart by theCWFC,forthepurposesofindustrialproduction.TheNorwayspruceprojectisacomponentofthiscollaboration,whichbeganinthemid-1990s.Inrecentyears,effortshaveresultedinthemassproductionofgeneticallytestedtreevarietiesforthecommercialimplementationofmulti-varietalforestry.
J.D. Irving has beenproducing improved varieties ofNorway spruceforthreeyears,andmorethan12,000treeshavebeengrownthroughSE.Testseriesatfourlocationswillbemeasuredthisyearforheight,diameter,currentweevilattack,visibleweevilattacksandothertraits.“ItisexcitingtoseethesetreesdevelopandbegintounderstandthevaluepropositioninSEproduction,”saysGregAdams,ManagerofResearchandDevelopmentforthecompany.
EarlierworkbytheCanadianForestService’sLaurentianForestryCentreis what led to the original Norway spruce selections, demonstrating thekindoflong-standingbiologicalresearchthathelpspowertheCWFCand,inturn,FPInnovations.
shorT-roTaTion woody crop projecT TheCanadianWoodFibreCentre(CWFC)hasestablishedanationaltech-
nicaldevelopmentsitenetworkof short-rotationwoodycropoptions forCanada, incooperationwith threeuniversities, fourprovinces,numerousprivate forest companies and landowners, First Nations and severalCanadian Forest Service (CFS) research scientists. Funded by the CWFC,ecoETI, Alberta Innovates – Bio Solutions, private forest companies andtheUniversityofGuelph,anationalnetworkofsiteshasbeenestablishedacrossCanada’sagriculturelandbaseinareassuitableforhigh-yieldfibreproduction.Plantationsofhybridandexotichardwoods(poplarandwillow)are being grown in area-based clonal designs to maximize volume andvalue: input operations and costs are compared to output volumes andvalues using developing fibre value simulation models. Numerous short-rotationwoodycropsystemshavebeendeployedtorefinebestpractices,assessthesuitabilityofvariousspeciesandclones,andcharacterizefibreattributes. Particular species, clones and system designs are also beingusedtoproducefibrewithattributesspecifictodesirablelocalproductsandvalues, includingstandingcarbon.Amongthetypicalproductsrecoveredfromshort-rotationwoodycropplantations arepulp andpaper,orientedstrandboard(OSB), lumber,biofuelsandbioenergy.FPInnovationsand itspartnersarecontributingtheattributeanalysisforthisproject.
3
FPInnovatIonsannual RePoRt 2009 / 2010
22_RevIew oF aCtIvItIes
1 technicians maria Ricci (l) and tatyana Yurchuk (R) attend a diluter where water and effluent are mixed and metered out to the aquaria below, which contain breeding groups of fathead minnows.
2 a male fathead minnow guards eggs adhering to the underside of the spawning substrate.
from garbage To gold: pulp mill sludge Transformed inTo valuable biomeThane
A joint effort by FPInnovations, government and industry players hasdemonstrated that waste-activated sludge from mills can be a valuablesourceofgreenenergy.Usingwood-basedwastematerialsas feedstock,thisinitiativehassuccessfullytransformedthesludgeintogreenbiomethanefuel.TheconversionmethodinvolvestheMicroSludge™process,inwhichfeedsolidsarehomogenized, in tandemwithanaerobicdigestion,whichusesmicroorganismstobiologicallyconvertthewasteintomethane.
Seeingwaste-activatedsludgeasarenewablefeedstockisatotalpara-digm shift for both the industry and the public. Following a thoroughassessmentstudy,thetransformativetechnologyhasbeenapprovedforatrialatapulpandpapermillinBritishColumbia,withcollaborationfromfederal and provincial governments, as well as universities and industryplayers.EquipmentdesignandmanufacturingaresetforDecember2010,withthetrialunitupandrunningbyearlyspring2011.
developing more effecTive conTrols for pulp mill effluenTs
In collaboration with Environment Canada and Canadian universities,FPInnovationsisworkingtoestablishbetterpracticesforthemanagementofpulpandpapermilleffluents.TheeffortsfollowfindingsoftheregulatoryEnvironmentalEffectsMonitoring(EEM)programthatshowedasignificantissue: endocrine disruptions in fish living inwaters that contained efflu-entsfromnearbypulpmills.FPInnovationsconductedshort-termfishtestsandasurveyofkraftmillsthatshowedthehigherthebiochemicaloxygendemand(BOD)intheeffluent,thegreaterthenegativeeffectsonthefish.ThehighereffluentBODcanresultfromaccidentallossesofblackliquor,theleftovercookingliquorfromthepulp-makingprocess,aswellasupsetsorinefficientbiologicaltreatmentoftheeffluents.
1
FPInnovatIonsannual RePoRt 2009 / 2010
23RevIew oF aCtIvItIes_
In these tests, theNational InvestigationofCause (IOC) research team– consisting of FPInnovations and other industry/government/academicleaders–foundthateffluentswithBODoflessthan20mg/Lhadnoeffecton fish reproduction. Therefore, mills with good control of their blackliquorlossesandimprovedeffluentbiologicaltreatmentsshouldnotdisrupttheecologicalbalanceof the lakesand rivers surrounding them.AspartoftheIOC,FPInnovationsisfurtherinvestigatingthisissue,andtheroleofbiological treatmentofeffluents to resolve it.Final recommendationsareexpectedwithintwotothreeyears.
2
finanCial review
FPInnovatIonsannual RePoRt 2009 / 2010
25FInanCIal RevIew_
a message frOm the Chief finanCial OffiCer
ContinuedfederalfundingoftheTransformativeTechnologiesProgram,alongwithothergovernmentstimuliand increasedfinancialparticipationbyprovincialgovernments,sustainedtotalrevenueatclosetoprevious-yearlevels(97%).Costreductioninitiatives,primarilyfrombenefitscurtailment,downsizingandsmallerbaddebtwrite-offs,easedoperatingexpensesto92%of2008–2009figures.
FPInnovations management successfully carried out the significantresearchinitiativesdescribedelsewhereinthisAnnualReport.Tosupportthefinancialmanagementandcontroloftheseprojects,thecompanyintroducedamodernEnterpriseResourcePlanning (ERP)systemonApril1,2009,replacingthreeantiquateddivisionalfinancialsystems.Thebenefitsofthisnewtoolaremanyanditisprovingtobeofsignificanthelptomanagers.In addition, our Human Resources management team has harmonizedthe various compensation programs, creating a single, uniform set ofjob descriptions and pay scales. Space rationalization, common signageand more multi-divisional projects are further signs of the merger’sgrowingeffect.
Inearly2009,thedeepeningeconomicdownturnthathadbegunthepreviousyearcauseddifficultyforourmembers.Inresponse,theBoardofDirectorsagreedtoadjusttheformulafordeterminingmembershipfeerates,creatingaslidingscalethatwouldriseandfallwiththeindustry’seconomicperformanceandproductprices.Bothhitnewlowsduringtheyear.Invoicingonthisnewratescaleforthe2009–2010financialyearthusresultedina70%declineinmembershipcontributionscomparedwiththepreviousyear.
Intermsofcashflow,wereliedheavilyonour$10millionlineofcreditwiththeRoyalBankofCanada,forwhichwepledgedoneofourbuildingsas collateral. During the year, our federal partner began to make somepaymentsinadvanceinsteadofinarrears,andbyyear-endMarch31,2010,we had drawn $5.1 million against the line of credit, down from$7.96million the previous year.By year-end,wehadgenerated a posi-tive operating EBITDA in excess of $3 million, which was used to fundpensionobligations.
Asreportedpreviously,significantefforthasbeenmadetoreverselastyear’sdeficit.Ourgoalwastobeinsurplusfor2009–2010andmanage-ment ispleasedtoreportthattheobjectivewasachieved,withasurplusof$1.39million.
Erik B. Peterson,C.a.Chief Financial officer
FPInnovatIonsannual RePoRt 2009 / 2010
26
coRpoRAte fInAncIAl Results
RevenuesouRces
Federal Core Contribution_ 5,2% Federal agreements_ 46.0% Provincial Core Contributions_ 1.3% Provincial agreements_ 18.2% other_ 9.9% Industry member agreements_ 9.3% Industry assessments_ 10.2%
Revenue($000)
93,96096,002
89,615
2009 Actual
2010 budget
2010 Actual
5,511
suRplus(deficit)befoReexceptionalitems($000)
(3,679)
1,3880
2009 Actual
2010 budget
2010 Actual
_FInanCIal RevIew
FPInnovatIonsannual RePoRt 2009 / 2010
27
fInAncIAl Results by sectoR
RevenuesouRces
0.0% _Federal Core Contribution
53.6% _Federal agreements
0.0% _Provincial Core Contributions
6.7% _Provincial agreements
16.6% _other
8.9% _Industry member agreements
14.2% _Industry assessments
RevenuesouRces
wood producTs
8.7% _Federal Core Contribution
37.4% _Federal agreements
2.0% _Provincial Core Contributions
27.9% _Provincial agreements
5.3% _other
12.2% _Industry member agreements
6.6% _Industry assessments
Revenue($000)
37,29737,492
33,720
2009 Actual
2010 budget
2010 Actual
suRplus(deficit)befoReexceptionalitems($000)
2009 Actual
2010 budget
2010 Actual
0
2,679(773)
371
RevenuesouRces
9.3% _Federal Core Contribution
46.2% _Federal agreements
2.6% _Provincial Core Contributions
23.6% _Provincial agreements
4.8% _other
4.9% _Industry member agreements
8.6% _Industry assessments
foresT operaTions
Revenue($000)
16,01217,20318,771
2009 Actual
2010 budget
2010 Actual
suRplus(deficit)befoReexceptionalitems($000)
0
2009 Actual
2010 budget
2010 Actual
1,527242
546
pulp and paper
Revenue($000)
40,65141,307
37,124
2009 Actual
2010 budget
2010 Actual
suRplus(deficit)befoReexceptionalitems($000)
2009 Actual
2010 budget
2010 Actual
0
1,305(3,148)
471
5,511
FInanCIal RevIew_
membershiP infOrmatiOn
FPInnovatIonsannual RePoRt 2009 / 2010
29memBeRshIP InFoRmatIon_
list Of membersAs At mARch 31, 2010
173827CanadaInc.A.Lapointe&FilsLtéeA.LandryFabricationLtéeAcadianTimber/ATLimitedPartnershipAcierEcan(DivisiondeAcierAGFInc.)ADFASTCorporation(AdchemAdhesives)AEFGlobalInc.AinsworthLumberCo.Ltd.AkzoNobelBoisPeinturesLtéeAlbertaNewsprintCompanyAlberta-PacificForestIndustriesInc.AlpaLumberInc.ArchWoodProtectionCanadaCorp.ArchitecturesTouboisInc.ArmoiresCuisinesActionArmoiresDistinctionArtopexAteliersSt-Jean1992Inc.AtelierNordikAtlanticIndustriesLimitedAutologInc.AVCellInc.AVNackawickBarrettEnterprisesLimitedBDM+Inc.Bégin&BéginInc.BerklineInc.BioWORTechnologiesInc.Boa-FrancInc.BoisB.S.L.Inc.BoisDittonInc.Boisd’oeuvreCédricoBoisExpansionBoisFrancModelInc.
BoisFrancMont-RoyalInc.BoisHuntingInc.BoisacoInc.BoiseCascadeAllJoistLtéeBoucherBrothersLumberLtd.BritishColumbiaTransmissionCorp.CamlenInc.CanadianForestService(NaturalResourcesCanada)CanforCanforPulpLimitedPartnershipCaribooPulp&PaperCo.ChemcoAcquisitionCorp.CoastTsimshianResourcesLtd.CollectionA2000/AlphavicInc.ColumbiaForestProductsCo.Ltd.ConceptFinimeubleConceptionR.P.Inc.Conférencerégionaledesélusdu
Bas-Saint-LaurentConférencerégionaledesélusdelaCôte-NordConférencerégionaledesÉlusdelaGaspésieet
desIles-de-la-Madeleine(CREGIM)CorporationInternationaleMasonite(La)CorporationSpringAirSommexCoopérativeForestièreNord-OuestCoopérativeForestièredeSteRoseCoopérativeForestièreFerland-BoilleauCoopérativeForestièreGirardvilleCoopérativeForestièredesHautes-LaurentidesCoopérativeForestièredelaMatapediaCoopérativeForestièredePetitParisCoopérativeLaterrièreCornerbrookPulp&Paper(Kruger)
CréationAlphaDesignInc.CuisinesExcelInc.CuisinesLaurierDamaboisInc.DavaInc.DetroitDeiselAllisonDiaconTechnologiesLtd.DistributionR.DésiletsInc.DK-SpecInc.DoepkerIndustriesDomtarCorporationDoucetMachineriesInc.DowChemicalCompany,TheDural,DivisionofMultibondInc.EastFraserFiberCo.Ltd.ÉloiMoisanInc.EnergieMitiEntreprisesD.M.(Les)–Div.de9143-
4316QuébecInc.ÉquipementsComactInc.EscaliersGillesGrenierInc.EstateHardwoodFloorsExpanderEnergyInc.FabricationDeltaInc.FederatedCo-operativesLimitedFélixHuardInc.FibrekInc.ForniramaInc.G.RomanoInc.GenicsInc.GestionCycloforGestionForestièreduSt-MauriceGestionForestièreLacroixGestionRémabec
membershiP infOrmatiOn
FPInnovatIonsannual RePoRt 2009 / 2010
30_memBeRshIP InFoRmatIon
GovernmentofYukonGiguère&MorinInc.GroupeDutailierGroupeG.D.S.Inc.GroupeLebel(2004)Inc.GroupeNBGInc.GroupeSavoieGroupeServicomInc.HelmitinInc.HultdinsHuppéetFrèresLtéeHydro-QuébecIndustriesPerronInc.IndustriesLacwoodInc.IndustriesPHLInc.IndustriesT.L.T.Inc.InternationalForestProductsLtd.InnovProtectInterboisInc.IslandTimberlandsLPJ.D.IrvingLtdJ.O.NoëlHouleetFilsinc.JMChampeauInc.JacomauInc.JanssenPMPJunctionLumberProductsInc.KenoraForestProductsLtd.KisisTechnologiesKop-Coat,Inc.KrugerInc.L&MLumberLtd.L’AntreGaulois(MenuiseLafrenière)LaciematériauxdeconstructionBPCanada/
BPBuildingProductsofCanada
LaboratoirePrimatechInc.LaboratoiresBuckmanduCanadaLtéeLakelandMillsLtd.LandesForestièresUAPATSInc.LaurentideInnovationsetRevêtementsLauzonIndustriesInc.LedwidgeLumberCompanyLimitedLesAdhésifsADHPROInc.LesArmoiresdeCuisinesDenisCoutureLesChantiersdeChibougamauLtéeLesEntreprisesBIZIERInc.LesEnterprisesD.M.–Div.De9143-4316LesIndustriesA.P.Inc.LesIndustriesAmiscoLtéeLesIndustriesdelaRiveSudLtéeLesIndustriesGrandmontInc.LesIndustriesJSPInc.LesMeublesViaInc.LesPlanchersMercierInc.LesPortesBaillargeonInc.LesProduitsForestiersARBECs.e.n.c.LesProduitsForestiersDGLtéeLiebherrCanadaLtd.LignolInnovationsCorp.LincolnPaperLouisiana-PacificCorporationLPEngineeredWoodProductsLtd.M.C.ForêtInc.MachinerieLicoInc.MachinerieTanguayInc.MaibecInc.ManningDiversifiedForestProductsLtd.MarcelLauzonInc.MarwoodLtd.
MatériauxBlanchetInc.MatelasMirabelInc.McRaeLumberCompanyLtd.MeadowLakeOSBLimitedPartnershipMeubleIdéalLtéeMeublesBusch(1980)Inc.MeublesCanadelInc.MeublesConcordiaLtéeMeublesGoberInc.MeublesLaurierLtéeMeublesVal-MauricieMicrotecIndustriesNorthAmericanInc.Mill&TimberProductsLimitedMillarWesternMLTInternationalInc.MobilierdeBureauLogiflexInc.MoncriefRenewablesLtd.NEFABNicoboisInc.NokamicInc.NorteckNewPagePortHawesburyLtd.NorthlandForestProductsLtd.OlosforsInc.OSIMachinerieInc.OutilsGladuS.E.N.C.PacificCarbonTrustPanoliteParquetsAlexandrainc.PeintureCan-LakInc.Planchersdebois-francsWickham
(2639-1862QuébecInc.)PlanchersdesAppalachesLimitéePlanchersMistralInc.
FPInnovatIonsannual RePoRt 2009 / 2010
31memBeRshIP InFoRmatIon_
PlanitCanadaPorterEngineeringLtd.PPGIndustriesInc.PrécitechInternationalInc.PrevercoInc.ProduitsforestiersArbecProduitsforestiersCanboInc.ProduitsforestiersLamcoInc.ProduitsforestiersSaguenayInc.ProduitsforestiersTemrexs.e.c.ProvinceofAlbertaProvinceofBritishColumbiaProvinceofManitobaProvinceofNewBrunswickProvinceofNewfoundlandandLabradorProvinceofNovaScotiaProvinceofOntarioProvinceofQuébecProvinceofSaskatchewanRCFCHoldingCompanyLtd.RénéSt-Cyr1996Inc.RichmondPlywoodCorporationLtd.RioTintoMinerals(U.S.Borax)RockyWoodPreserversLtd.RodiDesignInc.RolandBoulangeretCieLtéeRoméoLaflammeetFilsInc.RusticPortesetfenêtresSawquipInternationalInc.SealyCanadaLtéeScierieDuhamelScierieJeanRiopelInc.ScierieLeduc,DivisiondeStadaconas.e.c.ScierieSerDamInc.
ScierieSt-ElzéarScierieSt-FabienInc.ScierieTechInc.ScieriesChaleurSCSForestProducts,Inc.SéchoirMECInc.SevenIslandsLandCompanySignatureCuisinesA.C.Inc.SilvanaImportTradingInc.SimardcuisineetsalledebainsSimonLussierLtéeSherwin-WilliamsCompany(The)SimondsInternationalSlaveLakePulpSnowcapLumberLtd.SOCAMSoli-Meubles1997Inc.SoliveAjourée2000Inc.SolowaveDesignInc.SprayLakeSawmills(1980)Ltd.St.Mary’sPaperCorp.StadaconaS.E.C.(WhiteBirchPaper)StellaJonesCanadaStrachanForestProductsStructurlamProductsLtd.StuwixResourcesJointVentureSundanceForestIndustriesLtd.SylvicultureLaVérendryeSystechIndustriesInc.Teal-JonesGroup,TheTekmaHeatCanadaTeknion–Roy&BretonInc.TembecTembecResinGroup
ThermoStructureInc.TimberSpecialtiesCo.TimberWestForestCorp.TirePressureControlInternationalTolkoIndustriesLtd.TournageBeau-BoisLtéeTournagedeBoisDynastieLtéeTriangleKitchenLtd.TricaInc.Tri-TexCo.Inc.TruALLBuildingComponentsTruckbaseCorporationUniboardCanadaInc.Univ.ofNorthernBritishColumbiaUSNRVABSolutionsInc.ValsparInc.VanderwellContractors(1971)Ltd.VianceWestFraserTimberCo.Ltd.WesternArchribWesternForestProductsInc.WestmillIndustriesLtd.WeyerhaeuserWindsorTechnologyWintonGlobalWOLFTEKIndustriesInc.WoodPlusCoatingsZavishaSawmillsLtd.ZellstoffCelgarLimitedPartnership
FPInnovatIonsannual RePoRt 2009 / 2010
32_memBeRshIP InFoRmatIon
on wood pRoduct-bAsed InItIAtIves
researCh advisOrY steering COmmittees
on foRest opeRAtIon-bAsed InItIAtIves
ChairmanVacantCatherine CobdenForestProductsAssociationofCanada
Joe CostantinoMillarWesternForestProducts
Sophie D’AmoursUniversitéLaval
Jyotsna DalviIndustryCanada
André DenisQuébecMinistryofNaturalResourcesandWildlife
Lynn Embury-WilliamsCanadianForestProducts
Bob FriesenBritishColumbiaMinistryofForestsandRange
Peter KofoedWesternForestProducts
Norbert MaltaisScieriesChaleur
Eric MichaudDomtar
Ryan OliverTolkoIndustries
Steve PriceAlbertaAdvancedEducationandTechnologyLifeSciencesInstitute
Dan PriceTolkoIndustries
Tom Rosser NaturalResourcesCanada
Dennis RounsvilleTembec
ChairmanDon BanksTolkoIndustries
Melanie BoyceBritishColumbiaMinistryofForestsandRange
Ronald BrizardQuébecMinistryofNaturalResourcesandWildlife
Bruce ChisholmNewPagePortHawkesbury
Catherine CobdenForestProductsAssociationofCanada
Ralph CourtWeyerhaeuserCompany
Jyotsna DalviIndustryCanada
Ken HigginbothamCanadianForestProducts
Frank KennedyOntarioMinistryofNaturalResources
Martin LandryKruger
Claude LebelNorbord
Scott MarleauWestFraserMills
Michael MartelTembec
Bob NicholAlberta-PacificForestIndustries
Michael O’BlenisDomtar
Robert PinetteJ.D.Irving
Tom RosserNaturalResourcesCanada
Doug SklarAlbertaMinistryofSustainableResourceDevelopment
Tat SmithUniversityofToronto
Dave WhiteleyTimberWestForestCorp.
Eric YoungNewfoundlandForestService
FPInnovatIonsannual RePoRt 2009 / 2010
33memBeRshIP InFoRmatIon_
on pulp And pApeR-bAsed InItIAtIvesMike BradleyCanforPulpLimitedPartnership
Catherine CobdenForestProductsAssociationofCanada
André DenisQuébecMinistryofNaturalResourcesandWildlife
Yvon GirouxIndustryCanada
Al HitzrothZellstoffCelgarLimitedPartnership
Bob JonesNaturalResourcesCanada
Patrice ManginUniversitéduQuébecàTrois-Rivières–Centreintégréenpâtesetpapiers
Bruno MarcocciaDomtar
Guy MartinDomtar
Lois McNabbBritishColumbiaMinistryofForestsandRange
Daryl NicholAlberta-PacificForestIndustries
Yvon PelletierTembec
Martin PudlasCanadianForestProducts
Tom RosserNaturalResourcesCanada
Stéphane RousseauKruger
Marc-André TremblayFibrek(formerly-knownasSFKPulpFund)
Co-chairJim FarrellNaturalResourcesCanada
Co-chairKen HigginbothamCanadianForestProducts
Jorg BeyelerGovernmentofNovaScotia
Paul WatsonCanforPulpBlake BrunsdonJ.D.Irving
Francis ForcierQuébecMinistryofNaturalResourcesandWildlife
Keith DeeringNewfoundlandandLabradorDepartmentofNaturalResources
Cheryl LewisOntarioMinistryofNaturalResources
James FylesMcGillUniversity(SFMNetwork)
Michael MartelTembec
Keith McClainAlbertaMinistryofSustainableResourceDevelopment
Bob NicholAlberta-PacificForestIndustriesWinn Hays-BylBritishColumbiaMinistryofForestsandRange
on fIbRe-bAsed InItIAtIves
FPInnovatIonsannual RePoRt 2009 / 2010
34 _CoRPoRate InFoRmatIon
PresidentandChiefExecutiveOfficerPierre Lapointe
ExecutiveVicePresidentJim A. Dangerfield
VicePresidentJean Hamel
ChiefFinancialOfficerErik B. Peterson
CorporateSecretaryNorine Young
COrPOrate infOrmatiOnAsatMarch31,2010
offIceRs of the coRpoRAtIon
ChairJim LopezTembec
Don BanksTolkoIndustries
Kent CampbellSaskatchewanMinistryofEnergyandResources
David LindsayOntarioMinistryofNaturalResources
Dana HaydenBritishColumbiaMinistryofForestsandRange
Jim FarrellNaturalResourcesCanada
Ken HigginbothamCanadianForestProducts
Hank Ketcham IIIWestFraserTimberCo.
Pierre LapointeFPInnovations
Avrim LazarForestProductsAssociationofCanada
Yvon PelletierTembec
Charles TardifIndustriesMaibec
Dan WilkinsonAlbertaMinistryofSustainableResourceDevelopment
Al WardAlberta-PacificForestIndustries
ObserverJyotsna DalviIndustryCanada
boARd of dIRectoRs
boARd membeRs who ResIgned oR RetIRed In 2009–2010David de LaunayNovember30,2009
John DybleSeptember8,2009
Phil LatosNovember30,2009
David PatersonNovember30,2009
FPInnovationswishestothanktheseformerBoardmembersfortheirvaluablecontributiontothecompany.
www.fpInnovAtIons.cA570 st-jeAn blvd., poInte-clAIRe,Québec, cAnAdA h9R 3j9tel: 514 630-4100
® FPInnovations, its marks and logos are registered trademarks of FPInnovations.