Mill upgrades ahead of schedule for Interfor
By Mona Mattei
Grand Forks sawmill employees will be taking a three week unscheduled vacation starting Nov. 10 as International Forest Products Ltd. (Interfor) completes mill upgrades ahead of schedule.
When the mill re-opens in early December, Interfor anticipates that they will see a 10 percent increase in production, said president and chief executive officer Duncan Davies. Along with the capital improvements, they will be able to scale back from three shifts in the mill to two and still realize the increased production, he added.
“We’re very excited about the Grand Forks projects, as we are with the projects that have been achieved in Castlegar, and the work that has been done there in the past year,” said Davies. “I’d like to thank our capital projects group and the management crews at both mills for their contributions to the company.”
With the $27 million in investments into the Grand Forks mill over the past two years, Interfor’s key goals have been cost reduction, timber recovery improvement and the ability to have flexibility in their products. In September the mill was closed for two weeks to allow for a major paving project to take place, and in 2011 both Castlegar and Grand Forks planer operations saw linear high graders installed to maximize the value of the timber. Overall production has been up 12 percent, said Davies.
In Castlegar there were fewer projects completed totally about $5 million, but Davies noted they upgraded the scanning systems as well allowing for increased lumber recovery.
“Adams Lake and Castlegar are running exceptionally well,” Davies commented. “We’re delighted with the results that are being generated there. Both mills are doing very, very well.”
Interfor just released their third quarter results last week reporting net earnings of $1.1 million or $0.02 per share in the third quarter of 2012.
Excluding restructuring costs and other one-time items, the company’s net earnings in the third quarter were $0.6 million or $0.01 per share compared with net earnings of $0.9 million or $0.02 per share in the second quarter of 2012 and net earnings of $2.4 million or $0.04 per share in the third quarter of 2011, according to the report.
Lumber production in the third quarter was the highest in Interfor’s history at 350 million board feet, up 17 million board feet quarter-over-quarter from 2011, in spite of a two week curtailment at Grand Forks associated with the capital project underway at that facility. Sales volume, including wholesale activities, was 366 million board feet, compared with 363 million board feet in the second quarter.
During the quarter, the company’s B.C. Interior operations benefitted from higher product prices and lower export tax rates on shipments to the U.S. These gains were offset in part by higher log costs and the curtailment at Grand Forks in September.
In spite of recent positive news, the outlook for the American housing sector remains uncertain and concerns over sustainability continue. Export taxes have dropped to 5% for October but will increase to 10% in November. Canadian housing starts are expected to weaken through the balance of 2012.
Activity levels in China and Japan have improved in recent weeks and Davies said this market is very important strategically for the company. Davies is scheduled to be heading to China with a trade mission this month. With the improvements in the United States markets, Interfor has diverted some of their product from offshore markets to address the increased demand, particularly in the wake of Hurrican Sandy, Davies added.
Interfor continues to devote considerable attention to the capital projects at Grand Forks and Castlegar and the final stage of the Castlegar project is scheduled for completion in January.
Davies said that Interfor has been very happy with their investment in what was a difficult purchase of the old Pope and Talbot mills in the B.C. Interior, and that they are now seeing results being generated on that investment.
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