Canada’s top 500 CEOs
CEO #166: Henry Ketcham
Financial Post Magazine November 04, 2008
Since entering the family business more than three decades ago, Henry (“Hank”) Ketcham, CEO of Vancouver-based West Fraser Timber, has survived three recessions, but he says the current one takes the cake. “We’ve seen it bad,” he says, “but we’ve never seen it this bad.” In the U.S. housing market, which consumes 80% of B.C.’s interior lumber output, housing starts are down 50% compared to two years ago. West Fraser reduced production by 7% in 2007, and reported a $34-million loss. Still, Ketcham, who has been CEO since 1985, believes that if West Fraser can hobble through these hard times, it will be well-positioned to bounce back stronger than ever when markets improve. “By then, the industry will be downsized and supply will be tight,” he says.
RBC Capital Markets analyst Paul Quinn agrees that West Fraser, which has a reputation as an efficiently run company, could do well in the long run. “West Fraser is the best forestry company in North America. It starts with Hank and goes right through the company,” he says. “It’s taken years to develop that culture.” Partner that with the company’s collection of “excellent, low-cost mills,” and Quinn says investors that stick in for the long haul will be rewarded.
The company has little debt, allowing it to take advantage of deals – for example, in September it acquired a closed mill in Fort St. James, B.C., that it can reopen when markets improve. It’s also diversifying into new markets: The company entered into a partnership recently with Epcor Utilities Inc. to develop a biofuel plant using wood waste, a technology that stands to gain from B.C.’s plan to buy 100% carbon-neutral energy sources by 2010. “We’re very optimistic about the future,” says Ketcham. “We just don’t know when it’s going to arrive.”