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Tolko cuts back on stud mill capacity in Williams Lake and Armstrong

A day after the province announced a $69 million package to help forest workers affected by the downturn in the industry, Tolko has announced it will reduce capacity at its Soda Creek (Williams Lake) and Armstrong stud lumber mills.

The company, in a news release, said it is moving to a “flexible operating footprint” at the mills, which will reduce capacity by 20 per cent.

Troy Connolly, the company’s vice president, solid wood, says the decision is a result of high log costs in B.C. and weak market conditions.

“The continued and increasing pressures on log delivery costs in B.C. have eroded our competitiveness,” he said. “This, in addition to continued weak markets, means we must take immediate and responsible action to ensure our long-term stability in B.C. We are moving to a flexible operating footprint starting next week. We will continue to monitor our cost competitiveness regularly to determine if further downtime is required. Our top priority is sustaining the business and the many jobs and economic spinoffs it provides to our communities.”

Connolly emphasized that these actions have nothing to do with Tolko’s employees.

“We know this is not good news,” he says. “However, we have a tremendously engaged and talented workforce, and we want them to continue as part of the Tolko family. Reducing capacity and changing our footprint is the best way to keep people employed and mills operating. It also gives us the flexibility to immediately react and adjust our schedule should conditions improve. It’s the best possible option right now in current conditions.”

Connolly says employees were informed this morning and Tolko’s HR team is on-site working with them to ensure they understand the implications of this change and determine their next steps.

“We want everyone to know this is not a decision we made lightly. Unfortunately, this is a tumultuous time for Tolko and the industry. We are forced to make tough decisions to ensure we remain sustainable for the long-term. We deeply appreciate the patience and understanding of our employees and thank them for sticking with us through this difficult time.”

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