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Canfor to permanently close Chetwynd operations

Canfor to permanently close Chetwynd operations
Canfor has decided to permanently close its Chetwynd sawmill and pellet plant (photo courtesy Canfor).

Canada-headed forest industry major Canfor Corporation (Canfor) has announced additional restructuring changes to its operations in British Columbia (BC) in a bid to better align manufacturing capacity with the available long-term fibre supply in the Province.

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Earlier this year Canfor Pulp Products Inc. (Canfor Pulp) announced a decision to permanently close the pulp line at its Prince George Pulp and Paper Mill, in Prince George citing an extensive analysis of its operating footprint and the long-term supply of economic residual fibre.

The closure will result in a reduction of 280 000 tonnes of market kraft pulp annually.

Canfor has now decided to permanently close its Chetwynd sawmill and pellet plant and temporarily close its Houston sawmill for an extended period to facilitate a major redevelopment on the site.

We are making these difficult but necessary decisions to create a more sustainable operating footprint in BC. Our goal is to match our mill capacity with the economically available fibre for harvest to enhance our ability to compete and operate throughout the market cycles. This is what will ultimately create greater stability for our employees and communities while ensuring we can continue to provide the high-quality, low-carbon products that are in demand by our customers around the world, said Don Kayne, President and CEO of Canfor.

Both Chetwynd and Houston facilities will be closed following an orderly wind-down of operations that is expected to conclude early in the second quarter of 2023 and will remove approximately 750 million board feet of annual production capacity.

We recognize that today’s announcement will have both temporary and permanent impacts on employees, families, contractors and communities. That’s why we are putting in place a comprehensive set of support mechanisms to help minimize the impacts of this transition. In addition, we will be working with our industry partners and Indigenous Nations to ensure that fibre currently processed at the Chetwynd facility is utilized to support other local and regional manufacturing facilities, helping them to be more sustainable and to keep people working in the Peace Region, Don Kayne said.

Plans for a new wood processing facility

The company intends to build a new, modern, globally competitive manufacturing facility that employs state-of-the-art technology to produce high-value products from the sustainable timber supply in the region.

Canfor has been proudly headquartered in British Columbia for more than 80 years and, while we have and will continue to look for opportunities to diversify our product offerings and reach to keep pace with our growing customers, we have also invested significantly here at home, spending approximately CA$2.1 billion in our BC operations over the last 10 years. The Houston investment would represent another significant commitment and be amongst the largest capital expenditures in new wood products manufacturing facility in BC’s interior in two decades, said Don Kayne.

Project planning, scoping, preliminary engineering, and budgeting are underway. Canfor will undertake a comprehensive evaluation of the availability of economic fibre and a thorough project financial analysis, supporting a final investment decision by the end of the second quarter of 2023.

While the near-term outlook in BC remains challenging given the mid-term fibre supply constraints, this province remains an important part of our diversified operating platform, allowing us to serve customers around the globe, while providing good family-supporting jobs here. The changes we are announcing will help make us smaller but stronger in BC and help ensure we can continue to contribute to the economy and quality of life here in the Province for decades to come, ended Don Kayne.

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