Canfor Winter Logging Efforts to Be Tied to Market Realities

By 250 News

Prince George, B.C. –The message from Canfor President Jim Shepard  is that the economy is not out of the woods.   In a conference call to discuss the third quarter results which show Canfor had a

net loss of $5.2 million ,  Shepard says the U.S. housing industry is still  unstable with  one third of all homes now worth  less than their mortgages.  “This negative home equity factor has driven up

foreclosures and will likely do so for several more quarters” says Shepard. 

With that in mind, Shepard says there will be curtailments over Christmas, and Canfor continues to recalibrate the way it does business.  Log inventories at sawmills are at low inventories, and Canfor

expects to keep it that way.  When it comes to winter logging, “We’ll be very deliberate and very strategic in regards to our logging this year” says Shepard “We will not be doing logging as usual

then cutting back on lumber inventories or mill yard inventories. We will be deliberate right from the stump  all the way through to the mill yard in terms of being reactive to what the market place is offering.”

Shepard has been traveling over the past month, visiting Canfor operations and meeting with employees.   He says he has been briefing them on his outlook for the economy, and the company’s strategy.

“Let me say these are trying times for our employees, especially those who work in operations taking curtailments to respond to our markets. This is a difficult time for them which is not helped by the

conflicting headlines that appear each day about the present economy.”  

His economic outlook is not unlike a scene from a John Wayne movie  “It is the image of a besieged military unit that has been holding out and its spirits are lifted by the sight of dust on the horizon

indicating the cavalry is coming at last.  I don’t have to tell you the forest industry is one of the first to feel the effects of the recession and after nearly 2 year it’s natural for people to star hoping for

an  economic recovery to save us from  the horrible markets  we face , the cavalry coming to our rescue.  It’s true there has been some positive signs lately to entice one into thinking that the cavalry 

is coming.,  Unfortunately there’s also  a compelling number of signs to indicate  that the dust on  the horizon may not be the cavalry coming, but a dispatch rider saying that is not the case and we will need to continue  to conserve our resources in order to last  until the cavalry  can get to us.  In other words, we can’t count on the markets saving us just yet.”

Shepard   was quick to point out that Canfor has been aggressively reducing costs in all aspects that are not directly related to the process that sees a tree cut, processed and shipped to a customer. 

 The Board of Directors reduced their fees by 33%, all staff saw their salaries rolled back two years running, Canfor  sold the corporate jet, sold off surplus real estate, and will vacate it’s downtown

Vancouver offices by the end of the year.

On the bright side,  Canfor’s exports to China  have now surpassed the exports to Japan, and the move is toward higher grades of  lumber.

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