Canfor Announces Temporary Shut Down of Quesnel Sawmill
By 250 News
Wednesday, January 06, 2010 04:00 AM
Quesnel, B.C.- Canfor has announced it is curtailing operations at it’s Quesnel Sawmill, effective January 15th. This decision will impact approximately 180 employees.
This market related curtailment will remove about 255 million board feet of SPF lumber production on an annualized basis.
Canfor is not saying how long this shut down will last, saying only that it will be linked to market demand as well as the economics of running the sawmill.
It was just last month that Canfor announced it plans to restart the sawmill in Chetwynd this spring. That mill has been closed for more than a year, but the economics were favourable for a restart after the union membership agreed to accept a 20% roll back in wages. The mill is undergoing about $16 million dollars worth of retooling and is expected to have it’s first shift of 70 employees back on the job in late May.
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My thoughts at the time was that Quesnel was at risk given that Canfor outsourced the chip contract to an outside company they had no other ties to. Lomak didn't like it at the time, but I bet they figure they came out ok with this new development considering they picked up good contracts to replace Quesnel when they lost the contract to Chambers.
Its a bit of an odd ball situation anyways with Canfor shipping all those wood chips to PG, when there is a West Fraser pulp mill right next door in Quesnel... my thinking is the Eurocan shut down will mean Canfor will be taking the rail chips from Houston that went to Eurocan and shipping them to PG Pulp thereby taking the truck dumper out of action at PG for use with the new rail shipments, and the logistics of that need to be sorted out because they will have no ability to process the Quesnel chips with the line ups at the chip dumpers that will be created from all the chips out west heading this way in a few weeks.
I would not be surprised at all if we see those Chambers trucks heading west as well now like they were at Christmas, and I'll bet if West Fraser doesn't start taking more chips from the west, then they will at some point work a new deal with Canfor to restart the Quesnel mill and source those chips next door for the pulp mill... maybe even see a sale of the Quesnel mill to West Farser would make a lot of sense as well at this point depending on what West Fraser contracts were like for Eurocan suppliers I guess?
The big knock on effects of the Eurocan shut down are only now going to start being felt by the rest of the north and this is only the begining IMO.