WFP closes Squamish mill
December 20, 2005 By Pulp & Paper Canada
British Columbia is the target of the next mill closure, this time initiated by Western Forest Products. The compan…
British Columbia is the target of the next mill closure, this time initiated by Western Forest Products. The company will start shutting down its pulp mill located in Squamish during the week of January 23, 2006, and production will gradually peter out and completely stop on March 9th. The mill, which has an annual capacity of 275,000 tonnes of NBSK pulp, when it closes, will see 323 people lose their jobs.
Reynold Hurt, president and CEO of WFP, conceded the mill’s performance has been lackluster for years and the more recent economic situation provides the impetus for carrying out the inevitable. “Financial results from the pulp segment of our business have been unacceptable for many years,” he said. “Having considered the long-term market outlook, the impact of rising fibre and energy costs and the high capital requirements, we determined that the best long-term decision for Western was to exit the pulp segment and narrow our focus to our lumber business.”
Hurt confirmed that the company has been active in its search for a buyer for the facility, but the fruitlessness of that pursuit made the shutdown the only viable option.
Wood chips that came from the company’s four Vancouver Island sawmills to be used at Squamish, will now be sold under a new agreement. A partnership with Canadian Forest Products and Oji Paper Canada will instead turn those chips over to the Howe Sound pulp and paper mill for consumption there. Western will bank $35 million as a pre-payment against the future deliveries of chips, money it will use to fund closure costs at the Squamish pulp mill.
Print this page