West Fraser Purchases Norbord For $3 Billion

Shrinking Timber Supply Sends B.C. Companies On U.S. Mill Buying Spree

by Web Editor | Feb 27, 2015 | News

At first blush, year-end financials and stock prices for B.C.’s largest forest companies would suggest the province’s forestry sector is well on the road to recovery after a decade-long slump.

Interfor Corp., for example, posted record sales of $1.4 billion in 2014 and record production of 2.2 billion board feet. Stock values and market caps of B.C.’s three largest forestry companies – Interfor, Canfor Corp. and West Fraser Timber Co. Ltd. – have soared since the end of 2011. Canfor’s share prices have increased almost 180%, West Fraser’s more than 220% and Interfor’s a whopping 410% since the end of 2011. Based on market cap ($6 billion), West Fraser is now B.C.’s seventh-largest publicly traded company.

But that increase in production and stock value is largely attributable to recent acquisitions of sawmills in the U.S., not to a boom in their B.C. operations. In fact, Canfor and Interfor have both closed mills in B.C. in recent years. Warmer winters that led to a massive die-off of pine from the mountain pine beetle infestation are largely to blame.

B.C.’s largest forestry company, West Fraser, now owns 15 American sawmills, compared with just seven in B.C. and five in Alberta. About 36% of its shipments of lumber now come from its U.S. mills, said Rodger Hutchinson, West Fraser’s vice-president of investor relations. Interfor owns five sawmills in B.C., nine in the U.S. and will add another four U.S. mills this year. About 43% of Interfor’s current production capacity is in B.C., 57% in the U.S. Canfor owns 12 sawmills in B.C., one in Alberta and 10 in the U.S. It also owns four pulp mills in B.C., one wood bioenergy plant in Alberta and one in B.C.

From Business Vancouver: https://www.biv.com/article/2015/2/shrinking-timber-supply-sends-bc-companies-us-mill/