Agreement Reached with Interfor to Acquire Vavenby Forest Tenure
Vancouver, BC, Canada — Canfor Corporation (TSX:CFP) announced today it will be closing its Vavenby sawmill in British Columbia this July following an orderly wind down. Canfor has reached an agreement to sell the forest tenure associated with the Vavenby sawmill to Interfor for a price of $60 million. The sale of the forest tenure is subject to customary closing conditions including the consent of the Minister of Forests. Closing is expected to occur in the third quarter of 2019.
“Due to the current and long-term log supply constraints we face in the Vavenby region, along with the high cost of fibre, we have made the very difficult decision to permanently close the sawmill and sell the associated forest tenure to Interfor. The ongoing depressed lumber markets have expedited this decision,” said Don Kayne, President and CEO, Canfor.
“Today’s decision is not a reflection on our employees, our contractors or the local communities of Vavenby and Clearwater who have all contributed significantly to the operation of our mill,” added Kayne. “We deeply regret the significant impact to our employees, contractors and the communities, and will be working to support them through this difficult time.”
“The BC forest industry has recognized for several years that sawmill capacity must be reduced as the annual allowable cut decreases following the end of the Mountain Pine Beetle epidemic,” said Kayne.
The Vavenby sawmill has an annual production capacity of approximately 250 million board feet.
Following the closure of Vavenby, Canfor will have 12 sawmills in Canada, with total annual capacity of approximately 3.55 billion board feet.