Question-and-Answer Session
Operator
Thank you, sir. (Operator instructions) Our first question comes from the line of Herve Carreau with CIBC World Markets. Please go ahead.
Herve Carreau – CIBC World Markets
Yes, thank you. Just wondering if you, first, can tell us what are your fiber costs in British Columbia from the two different sources. And, second, I am just wondering if the congestion at the port also reduce your shipments in Q1? That will be appreciated. Thanks.
Jimmy Lee
David, you want to deal with that?
David Gandossi
Sure. On the wood side, Herve, the – maybe the way to think about it is on average wood costs in the southern part of the province are averaging around $50 to $55 a cubic meter. The woodroom all in costs for us now we are seeing, they are about $20 a cubic meter lower than some of our remote chipping, so that sort of gives you the range. And our own woodroom would be competitive with sort of the average of what the sawmills are charging us for residual chips today. So that’s the scope of the cost in British Columbia. All in our fiber cost in the first quarter is slightly lower than they were in the fourth quarter of last year.
Herve Carreau – CIBC World Markets
When you say that they are becoming more efficient, that all log shipping versus when you started it earlier last year?
David Gandossi
Yes. I think the sequence of events would be best thought of this way. The sawmills, as the lumber markets got more and more challenging, needed to charge more and more for chips to stay open, and we were suffering from that. Then we started optimizing our woodroom, but it – the failures in the sawmilling industry were so dramatic, we had to engage whole log chipping at remote chippers, and that is our most expensive fiber. And so a continuing modernization of our woodroom and updating its volumes will allow us to turn off those remote chippers and in this current environment our woodroom will become a very competitive chip with the sawmills and will actually help us create a ceiling on what we need to pay for fiber generally because we'll have the capacity ourselves at a price that’s affordable.
Herve Carreau – CIBC World Markets
But that will increase your bargaining like position for residual chips?
David Gandossi
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