West Fraser Timber sawmills cutting production by up to 25% in B.C.
Schedules at 5 mills in B.C. will vary depending on market conditions, company says
West Fraser Timber Co. Ltd. says it will introduce variable operating schedules at five of its British Columbia sawmills, resulting in an estimated 15 to 25 per cent decrease in production.
A statement from the company said, starting next Monday, the schedules at the mills will vary and be adjusted from time to time depending on market conditions.
It said the potential effect could be an aggregate estimated reduction of up to 100 million board feet through the end of the year.
Also starting next Monday, West Fraser said it will curtail B.C. plywood production for two weeks.
The affected sawmills are in Chetwynd, Fraser Lake, Quesnel, Williams Lake and 100 Mile House, while the affected plywood operations are in Quesnel and Williams Lake.
The company said it's taking the steps because of sustained weak markets, pricing in wood product markets and high log costs, and it will continue the varying schedules until market and economic conditions support a return to full production.
West Fraser has previously implemented temporary and permanent capacity curtailments of approximately 125 million and 614 million board feet respectively in 2018 and 2019.
Two months ago, West Fraser's CEO said the worst of the pullback was behind the company.
"From a strategic standpoint, much of our heavy lifting in British Columbia is now behind us," Ferris told a conference call to discuss the company's latest financial results on July 19.
While there is no quick recovery expected in B.C., West Fraser said its fortunes are looking brighter in the U.S. where it started expanding into 15 years ago at the height of B.C.'s mountain pine beetle outbreak. The region now accounts for more than 70 per cent of its lumber production.
The company, like many in B.C.'s lumber industry, has cut back and closed mills in recent months in response to limited log supplies and a plunge in lumber prices from record highs last year.
This year's mill closures and production curtailments in British Columbia have affected more than 5,900 workers at 25 mills in 22 communities, according to provincial estimates.
Observers say the frustrating part is that little can be done to fix the problem.
Destruction caused by wildfires and a severe mountain pine beetle infestation — both linked to global warming — have created acute shortages of wood fibre in B.C. that will take decades to replace.
Meanwhile, a slowdown in U.S. housing markets means prices are depressed, but the province says stumpage fees for Crown timber — adjusted quarterly — can't be reduced arbitrarily for fear of weakening Canada's legal fight against softwood lumber duties imposed by the U.S.