Citing log costs and current lumber market conditions, Conifex Timber Inc. said Friday it will be cutting back production its Fort St. James sawmill starting in the new year.
About 70 employees will be laid off as a result and comes after a two-week curtailment in November. The curtailment is expected to continue until about mid-2019 and will reduce the company's B.C. lumber production by 25 per cent.
“Moving to a single line configuration at Fort St. James in Q1 and Q2 lowers cash production costs and helps mitigate the combined impact of fibre supply issues and low lumber prices.” said Conifex chair and CEO Ken Shields in a statment.
“This is a difficult decision but we believe it’s the best option for ongoing sustainability at Fort St. James given current market conditions. We will be seeking to mitigate the impacts on our employees as much as possible.”
Conifex expects that a majority of its lumber production will be sourced from the lower-cost US South supply region in the first half of 2019, the company added.
As of Nov. 30, kiln-dried western spruce pine and fir 2x4's were selling for US$354 per 1,000 board feet, down form US$528 a year ago, according to Madison's Lumber Reporter.