New Brunswick

Glut of wood chips threatens Fredericton sawmill

The regional slowdown in the forestry sector is causing a glut in the wood chip market, according to a Fredericton sawmill owner.

Unsold wood chips blamed on pulp mill closures in Maine, Nova Scotia and Quebec

A Fredericton saw mill owner says his company is having problems because it cannot sell its wood chips 2:10

A Fredericton sawmill owner says his company is facing tough times because of a lack of buyers for his wood chips, which he is blaming on the regional slowdown in the forestry sector.

The wood chips are piled two storeys high outside of the Devon Lumber mill in Fredericton.

Harry Gill, the president of Devon Lumber Company, said he's struggling to stay in business without a market for those wood chips, which are typically a valuable byproduct for the company.

The wood chips usually go to pulp mills but the local market is flooded because of facilities that have shut down in Nova Scotia, Maine and Quebec.

Gill said the problem became more severe when JD Irving Ltd., the province’s largest forest company, stopped buying his chips for its pulp mills a month ago.  

"It's a lot of dollars for the company. So it is very important to us, yes," he said.

The company and its 40 workers are carrying on processing cedar products.

But Gill said the part of the mill that produces softwood lumber and chips for pulp has run only a day and half in the last three weeks because the chips make the difference between profit and breaking even.

Devon Lumber is not the only mill in the region that is seeing growing mountains of wood chips on their lots.

There are 35 sawmills in the province, and except for the ones owned by companies that also have pulp mills, they may not find buyers for the chips.

A regional problem

Mark Arsenault, the president and chief executive officer of the New Brunswick Forest Products Association, said there's an oversupply of chips on the market.

Arsenault is quick to list the reasons why those wood chip piles are continuing to grow.

"Newpage in Nova Scotia, Abitibi in Nova Scotia, the White Birch mill in Quebec, and also in Maine have shut down or stopped or reduced their receivables of pulpwood from New Brunswick," he said.

Arsenault said his association has made recommendations to the provincial government on ways to reduce the oversupply of wood chips.

Devon Lumber’s Gill also has a potential solution, which would be a drastic alternative.

"One of recommendations they're making is to leave some of that pulpwood, or more of it, or even all of it in the woods to rot. Leave it right there," Gill said.

"That will open up some markets as far as being able to sell the byproducts off of saw logs, which come from the sawmills. If we don't sell the chips, there's going to be less and less mills."