Business
Western Forest Products Announces Sawmill Restructuring
Western Forest Products Announces Sawmill Restructuring.
About this update from Western Forest Products Inc.
[{"type":"text","content":"\n\n\n\n\nTSX: WEF\n\nDUNCAN, BC, Nov. 14 /CNW/ - Western Forest Products Inc. (TSX: WEF) today\nannounced that following an internal evaluation of its sawmills after the\nacquisition of Cascadia on May 1, 2006, it has decided to close its New\nWestminster sawmill effective February 7, 2007. At about the same time, the\nCompany will re-open its Saltair sawmill on Vancouver Island, which has been\non indefinite shut-down since October, 2005. Today's announcement follows the\nreceipt by the Company today of certain third party agreements. The recent\nsoftwood lumber agreement between Canada and the United States had no bearing\non this decision.\nReynold Hert, President and CEO stated, \"The decision to close the New\nWestminster sawmill will allow us to remove the excess capacity in mills that\nhandle the small to midsize logs and capitalize on the Saltair sawmill's lower\nunit costs, additional sorting, and longer lumber-length capabilities.\"\nThe New Westminster sawmill, located on the Fraser River near Vancouver,\nproduces an assortment of lumber products of mixed species for the Asian and\nNorth American markets, and has capacity to produce approximately 150 million\nboard feet of lumber per annum. Severance and other closure costs are\nestimated in the range of $16 million to $21 million. The New Westminster\nemployees will receive their full benefits under the collective agreement.\nBecause the New Westminster sawmill was owned by Cascadia, the closure costs\nwill be accrued as part of the cost to acquire Cascadia and not as a\nrestructuring charge to Western's statement of operations.\nThe New Westminster lumber programs will be produced at the Saltair\nsawmill once it re-opens, which is expected to be around the beginning of\nFebruary 2007. The Saltair sawmill, which is also a small to midsize log\nsawmill, has an annual capacity of 215 million board feet. An initial\ninvestment of about $2 million dollars in optimizing equipment will be made\nprior to startup of the Saltair facility. The Saltair sawmill is expected to\ninitially operate on two shifts with 136 hourly employees. The number of\nhourly employees impacted at New Westminster is 284. As a result, the net\nreduction in hourly employment as New Westminster shuts down and Saltair\nstarts up will be 148. As many New Westminster employees as possible will have\nthe...