Conifex Timber is selling its Fort St. James sawmill and associated forest licence to 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 B.C.,” said Ken Shields, Conifex’s Chair and CEO, in a news release. “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.”
Hampton Lumber operates nine sawmills in Oregon, Washington and British Columbia, including two in the Burns Lake area of British Columbia.
“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 Steve Zika, Hampton Lumber CEO. “We intend to build a new sawmill in Fort St. James and look forward to building relationships with local First Nations and other community partners similar to a successful joint venture we have with the Burns Lake Native Development Corporation in the Burns Lake area.”
Due to continued uncertain market conditions, Conifex does not expect to resume normal operations at the Fort St James site prior to closing of the transaction. Closing is subject to certain regulatory approvals, including approval of the Minister of Forests, Lands, Natural Resource Operations, and Rural Development and other customary closing conditions. The proceeds of the transaction will be primarily used to retire debt and to provide additional liquidity so Conifex can better optimize performance and value at its other locations.