NASHVILLE, Tenn. & TORONTO, Ont. – Louisiana-Pacific Corp. and Norbord Inc. have agreed to swap OSB mills in Quebec. The asset exchange transaction is expected to close in early November.
Norbord (TSX and NYSE: OSB) is transferring ownership of its mill in Val-d’Or, Quebec to LP (NYSE: LPX) in exchange for LP's OSB mill in Chambord, Quebec. Both mills are currently shuttered.
LP said the acquisition of the Val-d'Or mill is part of the company's strategy to increase its growing siding business. “The Canadian mill exchange, coupled with the recent Minnesota acquisition, provides us flexibility and increases our ability to optimize our capacity for sustained business growth,” LP CEO Curt Stevens said. The panel producer acquired the former Ainsworth Lumber mill in Cook, Minnesota, in October.
LP said it will begin assessments for making the plants fully operational. “We have seen tremendous growth in our siding business and anticipate this growth to continue as we look to meet increasing demand,” he said. “The aim of these transactions is to provide additional siding capacity by the end of 2018.”
In exchange, Norbord said the Chambord mill provides easy access to resources and key markets, although it does not have immediate plans to restart the facility. Prior to its closing in 2008, the mill had a capacity of 470 million square feet on a 3/8-inch basis.
“This asset exchange will better align our portfolio of northern mills with our business strategy,” said Peter Wijnbergen, Norbord’s president and CEO. “The Chambord mill is larger and located in the Saguenay-Lac St. Jean area which is the biggest timber-producing region in Quebec. While market conditions do not support an immediate restart of Chambord, the asset is in good condition and is located closer to key markets, representing a better competitive opportunity for Norbord,” he added.
Norbord had suspended production of the Val-d'Or mill in 2012, citing a weak U.S. housing market and lower demand for OSB.
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