VANCOUVER, BC - Canfor said it has completed the acquisition of the Tembec Industries Ltd.'s southern British Columbia interior wood products assets. The $60 million deal, first announced Nov. 28, 2011, includes Tembec's Elko and Canal Flats sawmills and approximately 1.1 million cubic meters of combined Crown, private land and contract annual allowable cut. It also includes a long-term agreement for Canfor to supply residual wood fiber for Tembec's Skookumchuck mill.
In a release, Canfor said the additional sawmill production will add approximately 420 million board feet to its annual capacity bringing the company's total capacity to more than 5 billion board feet. Canfor has said it will to make capital investments in excess of $50 million in the southern BC mill facilities over the next few years.
"Canfor is pleased to welcome the former Tembec employees into the Canfor family and is looking forward to continuing the development of strong community and First Nations relationships," Canfor CEO and President Don Kayne said in a statement. "This acquisition strengthens Canfor's fiber position in BC while meeting the increasing needs of our highly valued global customers."
Late last year, Canfor announced the closure of its Rustad sawmill in Prince George, BC, and Tackama mill in Fort Nelson, BC. At the time, Canfor said the cost to modernizing the plants was cost prohibitive, but that it would spend $300 million on upgrading other existing facilities.
Earlier this year, Canfor announced it posted a loss of $44.1 million for the fourth quarter of 2011 compared to a $32.9 million profit for the same period in 2010. The fourth quarter loss dropped Canfor's year-end net income $56.6 million. 2011 sales for the year were $2.421 billion.
Sales are expected to pick up in 2012, Kayne added. Canfor is forecasting modest improvement in the North American lumber market, while the Canadian housing market is expected to stay steady. Offshore demand, including shipments to China, are also expected to be strong for the company.