|
Monday, October 13, 2008
|
|
|
|
Temp:
|
6°C
|
|
Feels like:
|
6°C
|
|
Humidity:
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Canfor building energy plant in Fort St. John |
|
|
Written by Tessa Holloway
Alaska Highway News
|
|
Friday, 01 August 2008 |
Related Items
WESTERN CANADAJIM SHEPARD
The money is coming from the $36.3 million the company expects to get from insurance payments for the plywood mill.
The new facility will be used to replace natural gas as the fuel for drying lumber at the facility. While the upgrade brings no new jobs to the sawmill, it will lower costs to make the facility more competitive, said Mark Feldinger, vice-president of manufacturing .
“With the current trend in energy prices it will have a significant impact on the profitability of our Fort St. John operation,” he said, adding construction will begin as soon as possible and is expected to finish by the end of the first quarter of 2009.
The investment also reflects a long-term commitment to the mill and the growing importance of the Peace region in the lumber market due to the limited influence of the mountain pine beetle in the area, he said.
Right now 80 to 85 per cent of the wood going through Canfor mills is beetle kill, and the company is expecting the timber supply to drop off dramatically in the North Central Region of the province, which was the primary reason for not rebuilding the Prince George plant and laying off its 280 employees.
“We will look at our capital investments with a view to long-term fibre supply at each of the facilities,” Feldinger said.
The company also just released its second-quarter results that show a significant improvement in the company's bottom line, but the ink on the page is still red.
The company's adjusted net loss for the quarter was $20.8 million, down from more than $60 million lost in the first quarter of 2008.
That reflected lower stumpage rates from the increased use of beetle kill wood, higher prices and efficiency improvements in the mills and closures of the highest cost operations.
Unit manufacturing costs in Western Canada were down six per cent from the previous quarter and 16 per cent from the second quarter of 2007.
At the same time, two-by-four prices were up $25 per thousand feet from the first quarter, and OSB prices averaged $174 U.S., up $36 from the first quarter.
Those improvements offset increased energy and shipping costs.
“The progress we've made is not insignificant and we expect to make more of it,” said president Jim Shepard.
Minister for Forests and Range Pat Bell said while he respected Canfor's decision, he was disappointed they chose not to rebuild the plywood plant.
He said there is more than enough timber supply in the Prince George area to supply the 300,000 cubic meters per year the plant used, and called on other companies to fill the void.
“I'm pretty sure we could find a way to have enough fibre on the market to allow for a plant like that to operate.
But one analyst said Canfor made the right move by not rebuilding the mill and instead investing the money in making existing operations more profitable.
“Down the road, you have to look at curtailing mills anyway, so trying to build up a new mill and then having to shut other mills down would be very difficult,” said Russell Taylor, president of the International Wood Markets Group. “And Canfor's bleeding money.”
-- With files from The Citizen
 |
|
Last Updated ( Friday, 01 August 2008 )
|
|
|
Who's Online
We have 31 guests and 1 member online
|
|
|
|
Subscribe to this comment's feed
