The move will affect approximately 60 employees at Fraser Lake and 75 employees at Quesnel Sawmill over the first and second quarter of 2019. The company expects to mitigate the impact on affected employees by offering them work opportunities at other West Fraser operations, according to a statement on its website. The reduction will also permanently curtail approximately 300 million board feet of combined lumber production at the two mills
“British Columbia faces a well-documented timber supply shortage owing to the devastating mountain pine beetle infestation,” according to the statement. “In anticipation of this decline, West Fraser has invested in excess of $500 million in its B.C. assets to improve the safety and competitiveness of its mills to attain maximum value from the available timber resource. Today’s decision better aligns West Fraser’s production with current timber supply.”
West Fraser is the third forest company in the North to announce cutbacks in the past few weeks.
Conifex Timber Inc. is temporarily curtailing sawmill operations at its Fort St. James sawmill for a two-week period commencing Monday, November 12, due primarily to log costs and current lumber market conditions.
An additional two-week curtailment is planned around the Christmas period, resulting in a total reduction of approximately 15 per cent of Conifex’s B.C. lumber production for the quarter.
Two weeks ago Canfor announced it will cut its production by 10 per cent in the third quarter.
West Fraser Timber Co. Ltd. reports third quarter 2018 results:
Third Quarter Highlights
- Strong operating cash flow and earnings despite lower lumber and panel prices
- Continued progress on finished goods inventory reduction
- Repurchased 3.5 million shares for $301 million at an average price of $85.96
- Start up of new Opelika sawmill
Nine Month Highlights
The addition of six Gilman sawmills in September of 2017 as well as strong product pricing in first half 2018 contributes to 29% increase in sales and 73% increase in Adjusted EBITDA
Cash flow from operations of $897 million year to date
Two dividend increases representing an increase of 82% in the annual payout
Quarter ending net debt to capital ratio of 11% and available liquidity of $838 million