Tolko Announces More Downtime

Thursday, September 20, 2007 03:58 AM

With the Canadian dollar at levels unseen for three decades, the lumber industry continues to feel the pain.

Tolko has just announced another round of downtime. This follows a series of production curtailments at several Tolko operations since last May.

Tolko Industries Ltd. announced its Kelowna Division will take downtime from October 9 to 19 and its Lavington Division will reduce its sawmill operation by one shift between October 1 and 12.

These curtailments follow a number of rotating curtailments undertaken by several of Tolko’s BC operations this summer.

“The continued decline in U.S. housing starts, high transportation costs, the rising Canadian dollar, and the resulting drop in lumber prices requires us to take these extra measures to control our costs,” says Jim Baskerville, Regional Manager, Okanagan Operations. “We will continue to monitor all our operations for economic viability.”

About 50 employees will be affected by the two-week curtailment of the Kelowna sawmill.

The one-shift curtailment at Tolko’s Lavington Division, located near Vernon, will affect approximately 20 employees.

Since May,Tolko has had downtime at its Questwood operation in Quesnel, and facilities in Williams Lake , Merritt, and at the veneer operations in Kelowna, Lumby and Armstrong. It has slowed construction of its I- joist plant in Alberta so instead of being ready for the end of this year, that plant is now scheduled to be up and running in late 2008.

Meantime, Canfor has announced it has done a little shopping. It's wholly owned subsidiary, New South Companies, Inc. has entered into an agreement to purchase the assets of Chesterfield Lumber Company, Inc n Darlington, South Carolina, for $18 million U.S. The Chesterfield Mill can produce about 140 million board feet of southern yellow pine per year. The deal is expected to close before the end of this year.

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Posted on Thursday, September 20, 2007 03:58 AM in News by 250 News

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Comments

Posted by: dgdiggler on September 20 2007 10:32 AM

Shrewd Canfor, very shrewd. They have bought down there because they realise that since the pine is no longer any good up here they can get more good stuff down there and process it south of the border. It will keep them going when they close up shop here! Look for a major announcement of Canfor hierarchy moving to South Carolina.

Posted by: Longnecks1 on September 20 2007 3:01 PM

It amazes me that forestry can't live at a par dollar. What did they do 20 years ago when the dollar was strong. Just make a very neat profit? The Americans have lived with a powerful dollar for years. Why hasn't every company in the states gone broke since they have never lived on a bonus from their dollar.
I believe every one should be proud that our dollar is strong and do their business the normal way everyone does.
If your can't afford to export then something is wong with your company. Just quit and let someone else do it...that will be happy with a normal profit

Posted by: Palopu on September 20 2007 3:39 PM

Longnecks. The last time Industry in Canada said they couldnt compete with the US because of the high cost of production, and the manufacturing tax, we ended up with the 6% Manufacturing tax being done away with, and the implementation of the 7% GST.

All manufacturing companies who export out of the Country are GST Exempt, so in essence the elimination of the Manufacturing Tax to business, resulted in a 7% increase in taxes to Canadian Taxpayers, so that the Government would not lose any revenue.

If we cant compete then we are in trouble. I agree with your hypothesis, however at the end of the day you know, and I know that the working stiff, will get it in the ear.

At any given moment we are 2500 to 3500 miles from any significant population area that has sufficient people to buy our products. We are totally dependent on the USA/Japanese/Chinese markets, with approx 80% of our exports going to the USA.

When the Americans dont buy, we suffer, and right now they are not buying. (At least not lumber)

Posted by: Palopu on September 20 2007 3:40 PM

Posted by: Harbinger on September 20 2007 5:17 PM

How come Americans never whine about their (ahem) strong dollar. If you don't whine, you ain't a real Canuck.

Posted by: Harbinger on September 20 2007 5:19 PM

One more thing. If and when I go to the States, I don't have to pay $1.50 fer a $.99 hamburger.

Posted by: dgdiggler on September 21 2007 7:03 PM

Weyerheusaur is closing down a mill permanently in okanagan falls....over 200 will be out of work. And an article about the pine beetle infestation was in the Province Newspaper - a very big article. SO now the south will feel the wrath of the MPB.