Norbord OSB Mills to See 25% Capacity Reduction

SEATTLE (Scrap Monster): Norbord Inc. announced its decision to reduce production at its oriented strand board (OSB) mills across North America. The planned restructuring will go into effect on March 30^th. The decision is in response to the drastic drop in market demand due to coronavirus outbreak.

The company press release noted that it has decided to reduce shifts at certain mills. In addition, it has decided to run some mills on alternating schedules, in line with the restrictions imposed by the government. This approach will help to continue serve its customers, by preserving as many jobs as possible. Further, it will enable the company to resume normal operations, as and when the market conditions improve.

The above mentioned operating adjustments are likely to reduce Norbord’s North American OSB mill capacity by almost one-fourth. Further, additional adjustments may become necessary in future, depending upon several factors including market demand and government-imposed restrictions, said company press release.

Norbord’s European mills are likely to announce similar changes in operating schedule. Also, the company has decided to downsize its 2020 capital expenditure budget by 25% from $100 million to $75 million, in order to ensure cash and balance sheet flexibility during the troubled times.

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