CANADA - Canadian lumber giants Interfor and West Fraser have announced major output curtailments due the outbreak of the coronavirus (COVID-19).
Interfor has announced it's cutting its lumber production in British Columbia, the Pacific Northwest, and the southern U.S. by 35 million board feet per week, for two weeks. That's about 60 percent of its capacity.
"We are very focused on ensuring the health and safety of our employees as well as adapting to the evolving market conditions," Ian Fillinger, Interfor’s president and CEO, said in a news release. "In addition, Interfor will remain disciplined in its approach to capital deployment as it focuses on retaining a strong capital structure."
The decision was made "in order to align production with the prevailing market," the company said. The move will reduce its capital expenditures for 2020 and 2021 by around $140 million.
Interfor curtails 60% of lumber production in response to COVID-19 conditions
Interfor competitor West Fraser will lower production at all of its sawmills in Western Canada and the southern U.S. beginning March 23.
"West Fraser has taken a series of actions to ensure a safe and productive working environment," the company wrote in its virus response plan. "West Fraser has implemented changes to mitigate potential exposure at our worksites, with a focus on thorough cleaning, strict travel limitations, health education and appropriate social and physical distancing at all company sites."
The company will also reduce employee hours, eliminate overtime, and eliminate shifts entirely.
Western Canada output will be reduced around 18 percent or 12 million board feet per week. U.S. South output will be reduced 24 percent or 15 million board feet. Plywood output will also be lowered.
Curtailments will stay in place until April 6 at the earliest.
These temporary reductions are expected to stay in place until at least April 6.
Canadian Prime Minister Justin Trudeau recently unveiled an $82 billion plan to support Canadian businesses and citizens during the coronavirus.
Have something to say? Share your thoughts with us in the comments below.