West Fraser Warns of Impacts of Policy Changes to B.C. Forestry Industry

SEATTLE (Scrap Monster): The myriad of policy changes by the provincial government could potentially impact the B.C. Forestry Industry. The above concern was raised by West Fraser Timber Co. during the Q1 2019 Results Conference Call.

Edward R. Seraphim, West Fraser Timber Co. Ltd. - CEO & Director stated that the company finds it difficult to plan for rapid policy changes by the B.C administration. For instance, various proposals including the Caribou Plan and Bill 22 legislation are likely to hinder B.C. forestry industry’s ability to compete with global environment. The company has invested over $600 million in B.C. over the past several years, as part of modernization of its facilities to meet the challenges. Further, he noted that the company’s capacity outside of B.C. has seen dramatic growth from just over 600 million feet in 2004 to just short of 5 billion feet currently.

The implementation of curtailments at a number of B.C. facilities including Williams Lake, Chasm, 100 Mile and Chetwynd sawmills coupled with weather-related issues presented a challenging quarter to the company. The quarter witnessed a permanent reduction in B.C. production capacity by 300 million board feet per annum. The removal of third shift at Fraser Lake and Quesnel mills impacted West Fraser’s lumber results. The higher B.C. log costs led to escalated manufacturing costs. Incidentally, the lumber shipments declined considerably by 125 million board feet from the prior quarter.