The company, which remained profitable while North America was reeling under the recession, expects industry demand for treated wood products to increase about 5 percent this year.
"Our key products, railway ties and utility poles, are used in maintenance. So even in bad times, there is a certain level of maintenance that the railroads, utilities and telcos have to do," Chief Executive Brian McManus told Reuters.
The company, which has a market value of $631 million, expects to gain from a rise in demand for railway ties -- used as a base for railroad tracks -- as freight volume picks up in North America.
"As increased traffic starts to flow, there's more wear and tear, and rail companies can't risk having lines that are not properly operating," McManus said.
He reckons the utility poles business in the United States, which suffered slightly during the downturn due to delays in maintenance plans, is also poised for a comeback, as postponed utility and telecom transmission projects resurface.
"And now we're seeing a renewed interest, largely in green energy. Utility poles help connect wind farms to the grid, and that's really where a lot of our green energy benefits are."
Improved mining activity in Canada, which has made steady investments in wind and other green energy projects in the last two years, is also expected to drive results at the company's utility poles business.
"If a new mine gets developed, we have to run electricity up to it."
Stella Jones, which competes with Kopper Holdings , posted better-than-expected results in the fourth quarter, on strong deliveries, but had forecast a softer first-quarter.
"We may still see year-over-year improvements, but we are giving a heads-up to the market that we have taken a bit away from the first quarter, because of the early deliveries in the fourth," McManus said.
The Quebec-based company, which has grown largely through acquisitions in the past, may make a few small buys this year, while it integrates Tangent Rail Corp, a U.S. railway tie maker that it bought last April, into its business, McManus said.
"And then into 2012 and 2013, we will certainly be active in looking for acquisition opportunities, both in poles and in the rail ties side." (Reuters)
