VANCOUVER, Canada -- Canfor Corp. is closing one sawmill and pellet plant and temporarily closing a second sawmill. The actions will affect nearly 500 workers, and remove approximately 750 million board feet of annual production capacity.
The announcement comes just weeks after the company announced it will permanently shut down its pulp mill in Prince George. Canfor is rationalizing its sawmill and pulp mill operations in B.C. to align with a shrinking fiber supply.
A company statement said, "To better align manufacturing capacity in British Columbia with the available long-term fiber supply, Canfor Corporation is restructuring its B.C. operations by permanently closing its Chetwynd sawmill and pellet plant and temporarily closing its Houston sawmill for an extended period to facilitate a major redevelopment on the site."
The company intends to build what it calls a "globally competitive manufacturing facility that employs state-of-the-art technology to produce high-value products from the sustainable timber supply in the region." Project planning, scoping, preliminary engineering, and budgeting are underway.
Canfor will undertake a comprehensive evaluation of the availability of economic fiber and a thorough project financial analysis, supporting a final investment decision by the end of the second quarter of 2023. Both facilities will be closed following an orderly wind-down of operations that is expected to conclude early in the second quarter of 2023 and will remove approximately 750 million board feet of annual production capacity.
In the statement, the company said "We are making these difficult but necessary decisions to create a more sustainable operating footprint in B.C. Our goal is to match our mill capacity with the economically available fiber for harvest to enhance our ability to compete and to operate throughout the market cycles. This is what will ultimately create greater stability for our employees and communities while ensuring we can continue to provide the high-quality, low-carbon products that are in demand by our customers around the world.
We recognize that today’s announcement will have both temporary and permanent impacts on employees, families, contractors and communities. That’s why we are putting in place a comprehensive set of support mechanisms to help minimize the impacts of this transition. In addition, we will be working with our industry partners and Indigenous Nations to ensure that fiber currently processed at the Chetwynd facility is utilized to support other local and regional manufacturing facilities, helping them to be more sustainable and to keep people working in the Peace Region.
Canfor has been proudly headquartered in British Columbia for more than 80 years and, while we have and will continue to look for opportunities to diversify our product offerings and reach to keep pace with our growing customers, we have also invested significantly here at home, spending approximately $2.1 billion in our B.C. operations over the last 10 years. The Houston investment would represent another significant commitment and be amongst the largest capital expenditures in a new wood products manufacturing facility in B.C.’s interior in two decades.
While the near-term outlook in B.C. remains challenging given the mid-term fiber supply constraints, this province remains an important part of our diversified operating platform, allowing us to serve customers around the globe, while providing good family-supporting jobs here. The changes we are announcing will help make us smaller but stronger in B.C. and help ensure we can continue to contribute to the economy and quality of life here in the Province for decades to come.”
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