MAPLE RIDGE, B.C. - British Columbia lumber giant Interfor will permanently shut down its Hammond sawmill, displacing more than 100 employees.
Once again, the challenging lumber market was cited as the reason, with log supply constraints being the primary issue. The plant will close by the end of 2019.
“The Coastal B.C. forest industry has faced significant log supply challenges over the past two decades and manufacturing capacity needs to be brought into line with available log supply,” Chief Executive Duncan Davies said in a statement.
The company will seek jobs for affected employees at its other three sawmills in the B.C. Interior. Interfor operates five sawmills in British Columbia, five mills in the U.S. Pacific Northwest, and seven sawmills in the U.S. Southeast. Total manufacturing output reaches more than 3 billion board feet of lumber each year. A total of 3,400 workers are employed.
Interfor has a pending offer to acquire fellow Canadian lumber producer Canfor's cutting rights. The offer was made soon after Canfor shuttered its Vavenby sawmill in July.
It's not just Interfor that's facing hard times. British Columbia - Canada's largest lumber-producing province - exported just over 514 million board feet of lumber to the U.S. in October 2018, down from 645 million board feet from the same time 2017. It has also seen more than 20 mill closures and curtailments. Many Canadian lumber leaders have taken a hit - including West Fraser, Canfor, and Conifex - and have either shut down plants or restricted production, with West Fraser and Canfor curtailing production more than once.
All cited challenging lumber markets, high log costs, log supply constraints, falling lumber prices, and U.S. import tariffs as factors.
Softwood lumber import tariffs of around 21 percent were levied onto Canada last year. The National Association of Home Builders (NAHB) told MarketWatch that those tariffs are restructuring the entire lumber global supply chain - incentivizing U.S. buyers to import from overseas rather than ship lumber across the Canadian border.
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