FORT ST. JAMES, B.C. - Canadian lumber manufacturer Conifex sold one of its British Columbia sawmills to Oregon-based Hampton Lumber for $39 million.
"We have known for some time that lumber industry rationalization is inevitable because too little sawlog supply is available to maintain the existing manufacturing base in the Interior region of BC," said Ken Shields, Conifex CEO. "The decision we have taken to sell the mill was extremely difficult; however, we are encouraged by Hampton’s plans for the site. We believe this transaction supports the Province’s objectives for industry rationalization that is mindful of the impacts on people, communities and First Nations. We sincerely thank our employees, contractors, and other stakeholders for their hard work and contribution to the site over the past decade."
Hampton Lumber operates nine sawmills in Oregon, Washington and British Columbia, including two in the Burns Lake area of British Columbia. Hampton Lumber CEO Steve Zika commented that,
"While economic conditions are extremely challenging right now for the lumber industry in British Columbia, we believe the long-term outlook for Canadian lumber is promising," said Hampton Lumber CEO Steve Zika.
Operations are currently shut down at the Fort St. James plant. Operations are not scheduled to be resumed before the transaction closes.
Canadian sawmills are clearly struggling. 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 leaders have taken a hit - including West Fraser, Canfor, Conifex, and Interfor - and restricted lumber production, with West Fraser and Canfor curtailing production more than once.
All cited challenging lumber markets, high log costs, log supply constraints, falling lumber prices, and U.S. import tariffs as factors.
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.
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