Canadian lumber firms boost production at US mills

VANCOUVER (Scrap Monster): The recent survey conducted by International Wood Markets indicates that lumber production by top Canadian companies reduced significantly during 2014. However, the drop in lumber production was compensated by increased production levels at US mills owned by them.

According to the survey, the production levels by top five Canadian firms dropped by 3.6% in 2014 when compared with the previous year, mainly on account of mountain pine beetle infestation. Among these, Canfor, West Fraser Timber and Interfor have mills in the US. These three companies reported dramatic rise in production at their US mills. The other two companies-Tolko Industries and Resolute Forest Products do not have mills in the US.

Top Canadian companies started showing interest in US mills almost a decade before, when West Fraser Timber acquired two mills in The US South. Since then these companies have invested heavily in the US mills. The trend has continued this year too, with Interfor purchasing another four US mills. The three companies owned 31 US mills combined, with a production capacity of 3.6 million board feet. Incidentally, West Fraser timber has emerged as the fourth largest lumber producer in the US.

The reason for shift of focus to US mills by the Canadian lumber majors is obvious, the survey noted. The overall lumber production in the B.C region in 2014 witnessed decline for the first time in five years. The infestation has largely hit lumber production, leading to closure of Quesnel mill by Canfor and Houston mill by West Fraser. Canfor’s production levels dropped 11%, whereas those of West Fraser and Tolko dropped by 3% each year-on-year in 2014. On the other hand, proximity to housing markets makes US South mills more attractive.