Canfor Corp. has decided to close two BC sawmills, idled following the collapse of the US residential housing market in 2008, but it is investing $300 million in other facilities.
VANCOUVER: Canfor Corp. has decided to close two BC sawmills, idled following the collapse of the US residential housing market in 2008, but it is investing $300 million in other facilities.
The Rustad Sawmill in Prince George and the Tackama Mill in Fort Nelson, both acquisitions (1999 and 2004 respectively), will no longer manufacture wood products, although the company says portions of the Rustad site will be used for trades training and education.
Approximately 200 people worked at Tackama and another 150 at Rustad when they were in operation.
The company said employees will receive statutory payments and severance as negotiated with the United Steelworkers.
Canfor said the capital investment needed to bring the Rustad facility up to globally competitive operating standards is “prohibitive” so it will instead focus on a $300 million, three-year capital investment plan on other facilities “where smaller amounts of capital spending can realize significant improvements in cost performance and capacity.”
Rustad was acquired in 1999 and Canfor operated the mill for 10 years until slowing US lumber demand forced the end of active production in 2009, following 62 years of continuous operation.
The Tackama mill was part of Canfor’s 2004 acquisition of Slocan Forest Products, and at the time was BC’s largest plywood facility.
The company is looking beyond the US market to Asia for new markets.
Canadian firms, with help from the BC and federal governments, have promoted the use of wood in construction in China, which traditionally has not used wood frame building techniques.
“We believe that demand for green, environmentally sustainable building materials will continue to grow in our core United States market and around the world, and that a bright and prosperous future is ahead for the BC forest sector and forest communities,” said Canfor CEO Don Kayne.
A TD Bank report in September said growing demand from China and a recovery in the US homebuilding market will come late in 2013.
Last week Canfor signed a deal to purchase Tembec’s BC Southern Interior wood products assets for $60 million. The Quebec forest products company is selling Elko and Canal Flats sawmills and 1.1 million cubic metres of lumber and cutting rights from Crown and private land.
Canfor has also restarted its sawmill in Vavenby in the BC Interior in September after a $24-million upgrade.
The capital investment included a new canter line, a new grade optimizer in the planer and an upgraded planer feed system.
At full production, Vavenby will add 240 million board feet of SPF to company capacity on an annual basis, Canfor said in a news release.
Canfor has operations in BC, Alberta, Quebec, Washington state, and North and South Carolina.
Files from The Canadian Press