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Interfor announces $25 million sawmill re-build plan, finalizes closure of Squamish mill

Interfor announced that it will invest $25 million to re-build its Western Whitewood (3W) sawmill operation in New…

Interfor announced that it will invest $25 million to re-build its Western Whitewood (3W) sawmill operation in New Westminster, BC.

Construction is scheduled to begin in November and will include the installation of state-of-the-art log optimization and breakdown equipment as well as new kilns. The mill’s planer will also be upgraded. The project is expected to be completed next April.

The re-build will significantly reduce the mill’s manufacturing costs and improve lumber recovery.
Production at the mill will increase from the current level of 80 million board feet (MMfbm) per year to 180 MMfbm on a two-shift basis, with the potential to increase to 270 million MMfbm on an expanded shift basis. There will also be potential for additional physical expansion of the mill in the future.

The mill will continue to produce for the Japanese and offshore markets and will have the flexibility to produce for North American markets.

Interfor also announced that after more than a year of curtailed operations due to poor economic conditions, the company will proceed with the permanent closure of its sawmill in Squamish, effective Oct. 31, 2004. The mill last operated in April 2003 and was also closed for a year between June 1998 and July 1999.

Since the curtailment in 2003, Interfor and the mill’s crew have attempted to develop a plan that would see the mill start up initially on a one-shift basis and run consistently.

Duncan Davies, Interfor’s President and Chief Executive Officer Interfor considered rebuilding the Squamish mill or converting it to a small log facility but concluded the investment could not be justified.

He added that both of the Interfor announcements are consistent with the vision document on rebuilding the Coastal industry, co-authored with TimberWest and Weyerhaeuser, and with the Pearse Report on the state of the Coastal industry.

“While some of this is difficult news for a number of people, we view these moves as essential steps for Interfor and the coastal restructuring process.”

As a result of the Squamish closure, Interfor will take a one-time provision of approximately $20 million pre-tax in its 3rd Quarter accounts to provide for the write-down of plant and equipment and for other costs associated with the mill’s closure.

Interfor has received several expressions of interest regarding the purchase of the mill site for redevelopment and the company intends to move forward as quickly as possible to enable the community to proceed with its planning for the future.