In This Issue:

• Message from the CEO
• Corporate News
• Operations
• Log Harvesting
• Forestry & Engineering
• Mill Report
• Safety Stats
• Safety
• Information Systems
• Calendar

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Message from the CEO

The Coastal Forest Industry continues in a downward spiral which will be the worse yet.

We have seen some of the pillars of the Coast fall in the past thirty days with the announcement of the bankruptcy of Madill's (out of Nanaimo – 100 jobs) who built yarders and loaders for almost every Coastal logging company. The shutdown on May 9th of Timberwest's sawmill in Campbell River affects 250 jobs. The net effect of shutting down this sawmill is another 145 jobs at Catalyst's Campbell River PaperMill and another 82 employees at Catalyst's Crofton operation. Western Forest Products is also making significant changes with the permanent closure of their Ladysmith sawmill (40 jobs) and the curtailment of harvesting operations on the Coast idling 800 loggers. The Harmac Pulp Mill in Nanaimo is still under bankruptcy protection and the proposed purchaser, Asia Pulp and Paper, missed the April 30th deadline to purchase the Company which leaves another 440 employees not knowing if they have a future. We also saw the number one sawmill equipment manufacturer, Coe Newnes (Salmon Arm), entering bankruptcy protection this week, putting 330 people out of work.

In summary, the preceding information means:

• Logging and Sawmill Manufacturers – 430 jobs under bankruptcy protection.
• Coastal Sawmills – 290 jobs eliminated.
• Pulp/Paper Mills – 227 jobs eliminated.
• Pulp/Paper Mills – 440 jobs under bankruptcy protection.
• Forestry Workers – 800 people laid off.

This is a very difficult time for many people involved in the Forest Industry.

With the strength of the Canadian dollar and the uncontrollable rising fuel prices, we will be focusing on costs and operational efficiencies in all Companies. As Cataract Lake finishes in early June and harvesting swings to Tree Farm Licence 54, we will be tendering this work out with our partners at MaMook. CFP will be bidding on these work opportunities, so it will be imperative that we are extremely cost effective in order to keep the harvesting operations busy.

Wayne