Canfor Corp. outgoing president and CEO Jim Shepard said Monday he's cautiously optimistic about the future after several tough years in the face of a U.S. housing collapse.
That's particularly true because the management team he led has put the company in an exceptional financial position despite the poor U.S. lumber markets, he told analysts during a discussion of the company's $55-million fourth-quarter profit.
Canfor, which had a total profit $161 million for 2010, is a major forest player in north and central B.C., employing more than 1,500 people.
The mills also create hundreds of spinoff jobs for loggers, truckers and suppliers.
"Although the U.S. housing recovery will likely be a slow, drawn process -- when combined with the increasing demand from Asian markets and the increasing shrinkage of the timber basket available [for spruce, pine and fir] -- it should ensure that we have a strong and sustained lumber pricing environment for the foreseeable future," said Shepard.
Shepard, who is stepping down this spring, will be replaced by Don Kayne, a 32-year company veteran who holds the position of vice-president of marketing and sales.
Shepard, a former Finning CEO, came out of retirement to take Canfor's helm on an interim basis nearly four years ago, then agreed to stay on until the company was in calmer waters.
After four consecutive quarters of profits, Shepard said he believes the management team has been hugely successful in bringing the company through the recession.
The management team also includes chief financial officer Tom Sitar, vice-president manufacturing Mark Feldinger and vice-president human resources Rob Stewart.
"Even with the incredible pressure on our cash -- as we struggled through the lowest lumber prices in a life-time -- we managed to pay down our debt to where we are now approaching a net zero debt position," explained Shepard.
It's positive financial position will now allow the company to invest $300 million during the next three years on further modernizing its mills, said Shepard.
The downturn did not come without pain to forest-based communities.
At the height of the U.S. housing collapse, Canfor shuttered sawmills in Prince George, Mackenzie, Chetwynd and Quesnel.
However, as the U.S. recovered modestly and a new market has emerged in China, Canfor restarted many of its sawmills, including the mill in Quesnel which exclusively supplies the Chinese market. Canfor shipped 30 per cent of its lumber to Asia, the majority to China, during the last three months of 2010.
Rustad Bros. sawmill in Prince George remains down, but the company announced last Friday it is investing $24 million in its Vavenby mill in the southern Interior which will be restarted by the end of summer.
Canfor is investing another $38 million on upgrades at its sawmills in Vanderhoof and at Polar, north of Prince George.
