Louisiana-Pacific's OSB sheathing
BRITISH COLUMBIA - Nashville-based engineered wood giant Louisiana-Pacific (LP) announced that it will indefinitely curtail oriented strand board (OSB) production at its Peace Valley plant in British Columbia.
“Despite efforts by our Peace Valley team to reduce costs over the past several months, this decision is necessary to support the optimization of our OSB business in challenging market conditions,” said Jason Ringblom, LP Executive Vice-President for OSB. “Declining housing starts, high wood costs and associated cost pressures require us to take this action that aligns with our performance driven strategy.”
“This decision ensures that LP is efficiently balancing our commodity OSB production with our customer demand and improving the overall competitiveness of our OSB business. Going forward, we will leverage our strong manufacturing footprint across Canada and the U.S. to meet the needs of our valued customers.”
Around 190 are employed at the Peace Valley OSB plant. OSB is among LP's primary products.
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.
Canada's imports to the U.S. have certainly slipped, as we've covered before. 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.
Many Canadian lumber companies, including West Fraser, Western Forest, Canfor, and Conifex, have restricted lumber production, with West Fraser and Canfor curtailing production more than once. North American giant Resolute Forest Products has also curtailed production.
All cited challenging lumber markets, high log costs, log supply constraints, falling lumber prices, and U.S. import tariffs as factors.
Headquartered in Nashville, LP operates 20 engineered wood manufacturing operations in the United States and in Canada, two in Chile and one in Brazil and employs about 5,000 people worldwide. The company manufactures OSB, structural framing products, and exterior siding for use in residential, industrial and light commercial construction. From manufacturing facilities in the U.S., Canada, Chile and Brazil, LP products are sold to builders and homeowners through building materials distributors and dealers and retail home centers.
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