OTCPK:TMBMF - Post by User
Comment by
dosperroson Dec 16, 2016 8:03pm
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Post# 25613220
RE:RE:Tembec product Asia
RE:RE:Tembec product Asiadosperros wrote: Great response.
Well, true that Asia can be a stretch but it's only going to cost $50/mfbm to send it over to Vancouver by rail. They just need a pressure release when the nasty tariff comes. They could partner with Tolko or one of the guys under the radar. Someone did that recently on panels if I recall (share a marketing and sales function).
But otherwise, I am not sure we're talking about the same company. Lopez's strategy was to become a power, spec cellulose, chemical, and paper producer. I recall hearing "with a lumber upside." So, here is where the rubber hits the road, dudes......
Why the sam heck is everyone hung up on the lumber segment that delivered 10.8% of fiscal 2016's profits? Profits, as in pure cash. This is no lumber company!! I've worked at Tembec lumber mills, and they are brutal compared to a Canfor Houston or a West Fraser Quesnel. Stuff barely works. It's slow and plodding. But that's TMB's advantage; they are not going to live and die on the pine beetle, SLA duties, etc.
I would suggest looking into the merits of the other 89.8% of the profit. That is where they have a competitive advantage. If Lopez wanted to go long on lumber I'd sell tomorrow because you'd need billions (literally) of new iron in the ground to compete with WFT and CFP (I've worked there too, and they are ferocious and excellent at 2x4 and 2x6 manufacturing).
See page 10 on the annual report, below, for where I get my numbers. Remmeber in manufacturing we only care about EBITDA as stuff like depreciation and ammortization are non-cash (i.e. imaginary) line items used to reduce a tax bill.
https://www.tembec.com/sites/tembec.com/files/pdf/tembec-financial-report-2016-en_1.pdf
But back to my yellow question. Do tell me why this is a lumber play? I am seriously confused. Becuase I don't think it is.
Have an awesome weekend. Just stay chill on the rum and hookrs cause that is a bad combo my shrill harridan friend (not OP, but angry rhino -- OP is a good dude).
Whoops sorry. I too HAVE BEEN EATIN RIBS AND DRINKI RUM. (Kidding). I should have said
89.2% of the profit. Accuracy matters in finance. #typo