CN and China’s CNBM Forest Products Trading Ltd. Strike Deal for B.C. Lumber Export Supply Chain Anchored On Vancouver Transload Facility

Aug 10, 2011 | Corporate Member News

Asian lumber export opportunities also prompt CN to expand capacity at Prince George, B.C., transload operation

CN (TSX: CNR)(NYSE: CNI) and China’s CNBM Forest Products Trading Ltd. announced today that they have reached an agreement to use CN’s new lumber transload facility in Vancouver to increase the supply chain capacity for Canadian lumber exports.

CN is scheduled to start operation of the lumber container export facility at its Thornton Yard in Surrey, B.C., in the fall of 2011. It will have an initial footprint of eight acres and throughput capacity of approximately 10,000 containers per year, with room to grow up to 20 acres. The facility, supplied with rail cars of lumber originating in communities in the British Columbia (B.C.) Interior, will make it easier to transport lumber to export markets in China.

Jean-Jacques Ruest

Jean-Jacques Ruest, executive vice-president and chief marketing officer of CN, said: “Lumber exports to China now account for close to 25 per cent of the western Canadian total and are expected to continue to increase at a fast pace in the years to come. CN aims to foster a world-class export supply chain for Canadian lumber in cooperation with CNBM Forest Products Trading, lumber producers in B.C., and ocean shipping lines serving Port Metro Vancouver.”

Ken Kao, general manager of CNBM Forest Products Trading – Shanghai, said: “It is imperative that we align expected demand with appropriate facilities and ocean capacity to accommodate the growth we see coming over the next few years. We are pleased to be able to conclude an agreement with CN on capacity at the new Thornton transload facility.

“For CNBM Forest Products Trading – the largest lumber buyer in China – CN continues to be a very important component of our global supply chain. With its access to both the ports of Vancouver and Prince Rupert and its commitment to support transload infrastructure, we can continue to meet our strategic growth objectives for the China market.”

CN also announced today that it plans to increase lumber transload capacity at its Prince George Distribution Centre to more than 30,000 containers annually. The facility was built in 2007 to support Port of Prince Rupert export opportunities.

Prince George, located 500 miles east of Prince Rupert, is in close proximity to British Columbia’s large fibre reserves and other natural resources.

Ruest said: “We are confident that, together, CN and its transload facilities, CNBM Forest Products Trading, lumber mills and ports in B.C. and ocean shipping lines can help spur increased economic activity and job creation in the province through a highly-efficient supply chain that will help meet increasing demand for lumber in China.”

Forward-Looking Statements
Certain information included in this news release constitutes “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. CN cautions that, by their nature, these forward-looking statements involve risks, uncertainties and assumptions.  The Company cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty.

Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of the Company or the rail industry to be materially different from the outlook or any future results or performance implied by such statements. Important factors that could affect the above forward-looking statements include, but are not limited to, the effects of general economic and business conditions, industry competition, inflation, currency and interest rate fluctuations, changes in fuel prices, legislative and/or regulatory developments, compliance with environmental laws and regulations, actions by regulators, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, labor negotiations and disruptions, environmental claims, uncertainties of investigations, proceedings or other types of claims and litigation, risks and liabilities arising from derailments, and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should be made to “Management’s Discussion and Analysis” in CN’s annual and interim reports, Annual Information Form and Form 40-F filed with Canadian and U.S. securities regulators, available on CN’s website, for a summary of major risks.

CN assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable Canadian securities laws. In the event CN does update any forward-looking statement, no inference should be made that CN will make additional updates with respect to that statement, related maters, or any other forward-looking statement.

About CN

CN – Canadian National Railway Company and its operating railway subsidiaries – spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.

About CNBM Forest Products Trading Ltd.

CNBM Forest Products Trading Ltd. is a leader in the sourcing of strategic materials to support the Chinese economy, including lumber from across the world and has developed significant volumes of Canadian SPF lumber, which are expected to grow annually for the next five years.

Contacts

Media

Louis-Antoine Paquin
Manager, Corporate Communications
Communications and Public Affairs
Phone: 514-399-6450
Email Louis-Antoine 

Investment Community:

Robert Noorigian
Vice-president
Investor Relations
Phone: 514-399-0052
Email Robert 

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