Canfor Boss Says Industry Not Out of the Woods
By 250 News
Monday, May 05, 2008 07:57 AM
Prince George, B.C. - There may be further cutbacks and shut downs in the lumber mills and Canfor President James Shepard says his company will not hesitate to take whatever steps are necessary “We are not waiting to look at what anyone else is doing to whether this storm, we’re doing what is in the best interests of the Company and the shareholders.”
Shepard told an investor analyst conference call this morning that while Canfor is not on the verge of any decisions to permanently close any other operations “Permanent closures are what the industry is looking at before we (the industry) get through this storm.”
The “storm” Shepard refers to is the depressed U.S. market, the high Canadian dollar and the 15% export tax.
Shepard says making a decision to close a plant, like the Polar Board plant in Ft Nelson, can be costly in the long run. “You can’t just flip a lever and bring it back on board. In Ft. Nelson there is a strong oil and gas and mining sector so all those technical people have been absorbed elsewhere.”
Most of Canfor’s wood operations have seen either full closure, indefinite closure, shift reduction or at the very least, reduction in work weeks, all in an effort to reduce the amount of lumber on the market. “There were 234 thousand property foreclosures registered in the U.S. in the month of March alone, that’s up 57% from March a year ago. There is a 10 month supply of homes on the U.S. market so there is no real appetite for the construction of new homes.”
Shepard says it is not likely things will turn around soon, but Canfor is acting aggressively to reduce costs and improve performance. On Friday, Canfor reported a net loss of $85.4 million dollars.
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Posted by: Outwest on May 5 2008 8:44 AM