May 2021 | vol. iv, #5

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THE PANDEMIC MADE LUMBER THE HOTTEST COMMODITY

Lumber isn’t an exciting product, but the pandemic gave it some flare. The increase in demand has led to an increase in prices for many products and materials, especially lumber.

Anything that involves a commodity right now is tough to price out.

“We've had to price things a little differently recently, just because the market is going up. It's 10 percent a week on some items,” said Morgan Wellens, sales and marketing manager at building products company Nicholson and Cates Limited.
Even with lumber being so volatile, Nicholson and Cates have changed their pricing strategy a bit. The company will hold product prices for the week.

“If there are big changes, we may even have to say, ‘Hey, you know, we have to move up a little bit here,’ if we're quoting. Part of our business is what we produce,” said Wellens. “Part of our businesses is trading, so where we're buying and selling on the open market, we quote that prior sale.”

Lumber and sawmills have plenty of airflow to mitigate dust, so COVID safety concerns haven’t impacted production much. According to Wellens, the lack of wood products is a supply and demand issue. The method of milling lumber hasn’t changed much over the years due to supply meeting demand. Now demand has increased, the lumber industry has created a bottleneck.  

“Wood has been so cheap for so long, lumber mills didn't make very much money. There was no incentive to expand the operation or to open up a new operation because we didn't want to go and spend $30 or $100 million or more,” said Wellens. “They were working on optimizing and trying to create efficiencies so that they could yield more, maybe increase output a little bit.”

Nevertheless, with people still stuck at home and construction projects picking up, demand for lumber remains high—regardless of the cost.

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PRODUCT SHORTAGES PLUS SOARING PRICES TOP DEALERS’ CONCERNS, SAYS SURVEY

Dealers are complaining about product shortages and it remains their biggest business challenge, according to a new survey by Hardlines.

In the 2021 Business Conditions Survey, we asked dealers what their biggest concerns are. The survey went out to dealers and store managers across Canada earlier this spring.

Availability of product was the No. 1 response, with almost 89 percent of respondents citing this challenge as their leading business concern. A related issue, sourcing and product shortages, was indicated by 71 percent of respondents.

The shortage of supply, especially of lumber and building materials, has driven up prices to new levels as both consumers and contractors scramble to get renovations done during the lockdowns. The price of lumber has almost tripled over the last year, with SPF (spruce-pine-fir) two-by-fours reaching $1,040 per thousand board feet—up from $445 a year ago.

Comments by dealers, submitted anonymously to ensure confidentiality of the results, including concerns about product shortages and the need for young people to look to this industry for career opportunities. “Keeping product on our shelves is my biggest concern. Our sales would have been up far higher if we had stock,” said one respondent.

“Product availability is extremely concerning. It seems to be a problem with most suppliers,” noted one response. “We have lots of customers looking to quote future jobs and we can’t say with certainty that products will be available. Plywood has been especially hard to obtain and is a necessity in the building industry.”

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In the photo, from left to right: André Buisson, President and CEO at Société Laurentide; Félix Buisson, VP Sales at Société Laurentide; Marc-André Lebel, co-owner of BMR Pierre Naud stores

BMR LAUNCHES PRIVATE-LABEL PAINT WITH QUEBEC MANUFACTURER

BMR Group has partnered with Société Laurentide to launch a house brand of paints under the Splendi and Splendi Supreme brand. The new line of acrylic paints was designed to provide affordable, quality paints suitable for both DIY and contractor customers.

Laurentide is a Quebec-based family business whose roots go back 70 years.

“The program has been in development for at least six months to a year,” said Jonathan Gendreau, VP of strategy and network development for BMR. “We were basically looking to change suppliers. As part of [parent company] Sollio, we always have to make sure we give an opportunity to a local supplier.”

BMR’s former private-label paint was supplied by Sico, which pulled out of the province early in 2019.

Paint represents the group’s best-selling category after building materials. In addition, its paint sales are up more than 15 percent so far this year. Across Quebec, industry sales are close to 13 million gallons (or 52 million litres), following a growth of more than 10 percent in 2020.

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