Interfor selling Quebec operations for $30M, exiting province
Interfor

Interfor is exiting Quebec, Canada. The plan includes selling three manufacturing facilities, and closing its Montreal offices.

QUEBEC, Canada — Interfor Corp. is selling three manufacturing facilities in the Province of Quebec, its Montréal corporate office, and exiting its operations in Québec. 

The company said these actions will allow it to "focus on the areas of highest future potential across the remainder of the Company."

As part of the exit plan, Interfor said it entered into a definitive agreement to sell its sawmills in Val-d’Or and Matagami as well as its Sullivan remanufacturing plant in Val-d’Or, along with all associated forestry and business operations, to Chantiers Chibougamau Ltée (“CCL”), a longstanding, privately-held, Québec-based forestry company.

The purchase price is estimated to be approximately CAD$30 million in cash, based on the value of specific working capital items at June 30, 2024, which will be subject to normal course adjustments at closing, plus the assumption of certain liabilities by CCL. Additionally, Interfor and CCL will enter into a multiyear contract for the supply of Machine Stress Rated lumber to Interfor’s I-Joist engineered wood products facility in Sault Ste. Marie, Ontario.

Interfor's operations in Québec are diverse. They are currently run by approximately 300 employees who will join Chantiers Chibougamau upon completion of the transaction. Matagami handles forestry operations, as well as wood sawing and drying. Val–d'Or carries out forestry, sawing, value-added products like bed frames, drying, planing, logistics and several administrative tasks.

Wood chips resulting from sawing in these plants are already largely integrated into the Nordic Kraft industrial complex in Lebel-sur-Quévillon, also owned by Chantiers Chibougamau. This was also their historical reality until 2005, when they were all owned by Domtar, which also operated the pulp mill.

The sale does not include any countervailing (“CV”) or anti-dumping (“AD”) duty deposits related to the ongoing US/Canada softwood lumber trade dispute. All historical CV & AD deposits up to the date of closing will be retained by Interfor. Total CV & AD deposits related to the facilities up to June 30, 2024, totaled approximately US$56 million, excluding any interest.

Interfor will continue to own and operate its five sawmills and one I-Joist EWP facility in Ontario and its two sawmills and woodlands management business in New Brunswick.

“After careful review of the potential future options for our Québec operations, we believe the sale to CCL is the best long-term outcome for Interfor,” said Ian Fillinger, President & Chief Executive Officer. “The decision to exit our Québec operations was influenced by recent developments that have restricted the availability of economic fibre, including record forest fires in 2023. This divestiture enables us to focus resources on our remaining Eastern Canadian sawmills situated in Ontario and New
Brunswick, which are well-positioned with competitive log costs and an increasingly valuable sprucepine-fir lumber product mix.”

The Val-d’Or and Matagami sawmills have a combined two-shift rated lumber production capacity of 255 million board feet per year, representing approximately 5% of Interfor’s total company-wide capacity. However, the mills only produced 206 million board feet of lumber in the trailing twelve months ended June 30, 2024, representing a utilization rate of approximately 80%. Since early August 2024, the mills have been operating at a utilization rate of approximately 50%.

The completion of the transaction is subject to customary conditions, including regulatory approvals, and is expected to close in the fourth quarter of 2024.
 

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Larry Adams | Editor

Larry Adams is a Chicago-based writer and editor who writes about how things get done. A former wire service and community newspaper reporter, Larry is an award-winning writer with more than three decades of experience. In addition to writing about woodworking, he has covered science, metrology, metalworking, industrial design, quality control, imaging, Swiss and micromanufacturing . He was previously a Tabbie Award winner for his coverage of nano-based coatings technology for the automotive industry. Larry volunteers for the historic preservation group, the Kalo Foundation/Ianelli Studios, and the science-based group, Chicago Council on Science and Technology (C2ST).