Written by GORDON HOEKSTRA
Citizen staff
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Monday, 17 November 2008 |
Ainsworth Lumber posted a $42.7-million loss in the third quarter, a slight improvement over the same period last year.
The company, which at one time had plans to build two panel plants in B.C.'s Northern Interior fed by beetle-killed timber, saw its sales drop to $115.3 million in the three-month period ending in September. The figure was down from $150.8 million during the same period in 2007.
The drop in sales was a result of production curtailments taken to respond to a collapse in the U.S. housing sector.
The company went through a major restructuring this summer, which all but eliminated its long-standing family ownership.
Following its restructuring, the new management team has moved to reduce overhead costs and improve operating efficiency. The measures include a dramatic decrease in staff, office space and general administrative costs. The company's aircraft was also put up for sale.
Ainsworth has also permanently closed its Grand Rapids, Minnesota oriented strand board (OSB) plant and indefinitely shut down its other two Minnesota OSB mills.
Many of the benefits of these moves will not be felt until early 2009, said the company.
Ainsworth executive Bruce Rose told analysts on a conference call Monday the company expected little "meaningful improvement" in the near future. "We will remain focused on liquidity, cost reduction and market and product development work," said Rose.
Ainsworth continues to operate an OSB plant in 100 Mile House, south of Prince George.
The company had announced in 2005 it would spend $400 million to build two OSB plants in northern B.C. to tap into mountain pine beetle-killed timber.
The plants -- which were to be built in the Prince George and Quesnel areas -- were expected to create 750 jobs.
Ainsworth had won a pair of massive beetle-killed timber salvage licences tendered by the province to fuel the plants. In the fall of 2006, Ainsworth walked away from the timber salvage licence in the Vanderhoof area, saying it would build only one plant.
The deadline for the start of construction for the remaining plant is Jan. 1, 2009, and analysts say there's little likelihood that plant will be built.
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Last Updated ( Monday, 17 November 2008 )
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