VenconUSA and Model Offer GREEN Hardwood Flooring

TopGreen Program
Overview

Harvesting, manufacturing and quality standards are rising in industry, as are consumer
expectations. In light of this fact, and as manufacturers, we must inform customers of our
position regarding the certification of logging companies supplying us with raw
materials. Given this perspective, PG Hardwood Flooring, Model Hardwood and
Beauceville Flooring (hereafter referred to as PG Group) introduced a forest certification
program in 2004. The purpose of the program is to encourage and support sustainable
forest management.

Here are some facts provided by the Canadian Lumberman’s Association (CLA) on
Canadian forestry harvesting:

To begin with, 50% of land in Canada consists of forests, 94% of which are public
property with the remaining 6% privately owned. Among these forests, only one quarter
are designated as commercial territories for wood harvesting. The logging industry
annually harvests 0.4% of the commercial surface, while forest fires, insects and disease
destroy another 0.5%. Moreover, the certified forestry surface in the country is expanding
continuously.

In the matter of certification, PG Group has dealings with three organizations presently in
operation: the CSA (Canadian Standards Association) with its Canadian standards in
sustainable forest management, SFI (Sustainable Forestry Initiative) and FSC (Forest
Stewardship Council). These three organizations manage standards programs that do not
compete with each other. Rather, they complement each other, with each organization
providing for the particular needs of its respective clientele. Standards certifying that
forests are indeed managed in a sustainable manner and the chain of custody of wood are
then enforced.

To obtain a certificate based on a particular standard, timber harvested in certified forests

is first identified by markings and painted logos as part of the chain of custody. The
marking process continues during subsequent stages in processing to ensure the transfer
of information and separation of lumber. Thus, the customer is sure to obtain goods with
a sustainable vocation when purchasing a certified product.

Certification is relatively expensive, and in some instances, as in the case of the FSC, it
can be more costly than the market value of the products, making it impossible for some
private producers to adhere to a certification program. Since most deciduous lumber is
harvested from private land, it is obvious that not all our raw materials come from
certified forests.

As a major consumer of raw materials, PG Group cannot limit purchases to one supplier
alone. Consequently, it is evident that we cannot accept wood from lots operating under
the criterion of a single standard. This is why we consider all sources of wood certified
under the terms of a sustainable forest management standard acceptable, rather than
accepting only raw materials corresponding to one standard in particular.

To meet expectations, our supply officers have already taken steps and will continue to
base their decisions on four main priorities:

• Source of raw material

• Respect for raw material
• Chain of custody
• Recycling and reforestation

These guidelines are applied on a daily basis in our companies and clearly demonstrate
environmental concerns supported by PG Group.

Raw Material Origin

Purchasing priority will be given to suppliers who apply two major principles of forestry
management:

• Harvesting plans: using different felling methods such as shelterwood cutting

and selection cutting to favour and protect natural forest regeneration. These
felling methods are approved by forestry engineers working for both
government and industry. By supporting companies that harvest wood
legally and responsibly, we hope to contribute to the survival of flora and
wildlife and the conservation of biodiversity.

• Tree crop regeneration: ensuring that wood producers comply with

reforestation (planting, seeding and natural regeneration) laws and
regulations.

PG Group is committed to avoiding the use of non-certified wood from a controversial

source. Accordingly, PG does not purchase:

• wood harvested illegally

• genetically modified wood
• wood harvested from forests affected by persistent social conflict
• wood from highly protected non-certified forests (according to the HCVF (High
Conservation Value Forests)

In order better to know our raw materials suppliers and to underwrite our commitment to
sustainable forest management, we visit each of our suppliers at least once a year. This
allows us to follow up on written commitments. A letter describing our principles and
requirements is based on a reference provided by the Québec Wood Export Bureau (Q-
WEB). A sample of this letter may be found in appendix.
Respect for Raw Materials

From the standpoint of PG Group, raw materials warrant special consideration in order to
avoid waste and, in so doing, decrease consumption.

These are the steps we have taken to date to encourage sustainable forestry and
protect the environment:

• Wood purchased by PG Hardwood Flooring and Model Hardwood is FSC (Forest

Stewardship Council) accredited in terms of chain of custody.
• Exotic hardwood (from Brazil) may also supplied by FSC suppliers accredited in
terms of chain of custody.
• We produce five widths of boards. Each piece of wood received from a supplier
must be squared before being sent to the shaper. Since the sizing of output is
random in some categories of widths, there can be material loss resulting from
board rejection. A range of five widths offers better combinations and less loss
during the edging process. - We now sell non value-added grades (Tavern and
short boards 6 to 8 inches long, not included in our regular product line).
Formerly, these grades of wood were processed as waste. This saving of raw
material accounts for a significant percentage of all necessary consumption.
• We have increased skid volume to 1040 square feet. Consequently, there are fewer
blocks of wood between skids and boxes taking up available space during
shipping. This action optimizes the use of loading space in trucks, which in turn
decreases the number of individual loads for a given quantity of wood, thereby
reducing greenhouse gas emission.
• We store stickered wood in shelters. This prevents sunlight from drying the wood
on top and along the sides of piles. Wood that dries too quickly changes the
humidity levels in exposed wood, leading to constraints on the wood that exceed
its mechanical resistance to cracks. By decreasing the percentage loss attributable
to sunlight, we use fewer raw materials and contribute to a better quality
environment.
• A coat of wax is applied to the ends of all boards before drying and concrete
blocks are used as weights. The wax prevents the appearance or lengthening of
cracks and the concrete blocks improve the quality of pieces of wood drying on
last rows at the top of piles. Both procedures contribute to decreasing raw material
loss.
• While awaiting processing, seasoned wood is stored in closed warehouses to
minimize losses attributable to mould and exposure to sunlight.

Chain of Custody (traceability)

We have implemented an in-house procedure to trace wood right up to the finished

product. All wood is coded upon receipt and follow-up is ensured at each stage, from
production to packaging. The chain of custody does not contribute to any environmental
improvement. Its purpose is to identify suppliers who sell us certified wood so that we
may then affix the appropriate logo on boxes of finished products. When a consumer
chooses boxes identified with a certification logo, he or she contributes to sustainable
forest development by increasing the demand for these products.

Recycling and Reforestation

We use waste wood to heat our driers and buildings. Cogeneration is a responsible,
efficient and reasonably priced way to produce steam. Steam is used to operate the driers.
The waste we burn would otherwise have been buried in landfills, leading to high
concentrations of organic matter in the soil and an increase in the concentration of toxic
products such as mercury. Other sources of usable energy include natural gas or heating
oil, but both release greenhouse gases in large quantities during combustion.

We also recycle all waste other than wood (paper, cardboard, metal, chemical products).
Most of the products we recycle are then purified and re-used as raw materials for
products made from recycled materials.

Sawdust from wood not burned is used in the production of derivative products. This
kind of waste is used by various industries in the production of engineered wood
products.

PG Group supports reforestation efforts through a sponsorship and awareness program

aimed at both customers and the community at large. PG Group identifies specific
programs involving reforestation and respect of the environment in order to help them
achieve their objectives.

Awareness incentives have already been piloted by PG Group as, for example, the Saint-
Édouard-de-Lotbinière elementary school program. In this program, several hundred
softwood trees were purchased and distributed among the school children and our
company employees. The public was very appreciative of this initiative. The purchase of
teaching material on trees for elementary schools in the region has also proven very
popular among teachers and students.

Finally, all land owned by PG Group will be completely reforested in cooperation with
the local Groupement forestier.

Conclusion

At PG Hardwood Flooring, Model Hardwood and Beauceville Flooring, we are fully

aware of the problems facing the forests of today and tomorrow. This is why we want to
participate actively in the protection of our forests. We believe that decisions today to
encourage sustainable forest management will guarantee a promising future.

We created a new website to present the environmental values we consider important.

Visit http://www.pgmodel.com/global/planet/en/.
Certification and Membership
NWFA - National Wood Flooring Association

http://www.nwfa.org/

FSC - Forest Stewardship Council

http://www.fsc.org/

WFCA - World Floor Covering Association

http://www.wfca.org/

CLA - Canadian Lumbermen’s Association

http://www.cla-ca.ca/