BRITISH COLUMBIA - One of the last remaining Canadian lumber giants not to curtail production has finally done so at its British Columbia sawmills.
Western Forest Products announced temporary lumber production curtailments at three of its BC sawmills to better meet current customer demand, the company said. Its Duke Point sawmill will see two weeks of downtime and its Saltair sawmill will see one week. Western Forest will also reduce operation from 120 hours a week to 80 hours at its Chemainus sawmill.
“The temporary production curtailments are necessary due to challenging market conditions,” said Don Demens, Western’s President and CEO. “The challenge of weak markets is compounded by the disproportionate impacts of softwood lumber duties on high value products, including Western Red Cedar.”
The curtailment will reduce production by approximately 15 million board feet. Western has an annual lumber capacity in excess of 1.1 billion board feet.
We wrote in February that Western Forest was among the only major Canadian lumber manufacturers seeing growth. The company saw a record $1.2 billion in revenue last year, up 6 percent from $1.14 billion in 2017. Its profit, which reached $70 million, was seen despite being forced to pay $43 million in softwood lumber duties.
Now it joins the other Canadian lumber firms to restrict production. Many of Western Forest's Canadian competitors, including West Fraser, Canfor, and Conifex, have restricted lumber production, with West Fraser and Canfor curtailing production more than once.
All three cited challenging lumber markets, high log costs, log supply constraints, falling lumber prices, and U.S. import tariffs as factors.
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.
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