by GORDON HOEKSTRA Citizen staff

Brink Forest Products Ltd. announced Monday it has bought Palliser Lumber Sales, combining the two largest lumber re-manufacturers in B.C. and Alberta.

The purchase nearly doubles the size of Brink Forest Products Ltd., based in Prince George, creating a company with nearly 500 employees and production capacity of lumber products of 500 million board feet a year.

The purchase price was not disclosed.

"It makes us the biggest re-manufacturer in Canada by far," said John Brink, who started his company in Prince George 30 years ago.

Brink said the thrust behind the purchase is no different than that driving larger companies that have merged and consolidated. Last year's merger frenzy left three major companies operating in B.C.'s Interior: Canfor, West Fraser and Tolko.

"In order for us to better serve our customers we must become larger in volume, and the other part of it is there are a number of synergies between the two companies that obviously helps us in reducing costs," said Brink.

The buyout of Palliser, located just outside Calgary, also helps boosts Brink's purchasing power of raw materials, which includes low-grade lumber and trim ends from sawmills, he said.

The two companies can learn from each other as well, said Brink.

For example, Palliser has built close relationships with retail outlets, and sells 70 per cent of its products in Canada. The other 30 per cent is sold in the U.S.

It's the opposite for Brink Forest Products, which sells 70 per cent of its products into the U.S., where they're hit by punishing softwood lumber tariffs. "We intend to build on that area," said Brink.

On the other hand, he said Palliser -- which produces lumber, fence boards and pallet stock -- does not produce finger-jointed lumber, a specialty of Brink Forest Products.

The combination of the two companies will not result in any job losses, as the idea is to grow the companies, said Brink. Palliser will operate under its name as a wholly-owned subsidiary of Brink.

Prince George will remain the company's headquarters.

Former Palliser owner Doug Currie said the buyout by Brink Forest Products was the next logical step in the growth of the company. Another of the company's former owners, Jim Thorogood, said the timing and fit could not be better. "I believe this purchase offers security and greater opportunity to our employee base at Palliser Lumber," said Thorogood.

Howie Kroon, president and CEO of Palliser, said the two companies complement each other. "Both companies specialize in the processing of low-grade lumber into value-added lumber products, which will assist us greatly as we pursue industry best practices and new markets (and) products," said Kroon.

Brink has been on an aggressive push to expand his companies in the last few years.

At the end of 2003, the company announced it had bought Pleasant Valley Remanufacturing, located in Houston, 300 kilometres west of Prince George. The plant produces wood blocks which are the feed material for finger-jointing.

Then in 2004, Brink added a pair of finger-joint manufacturing lines at his operations in Prince George.P>

The company is also in the midst of adding a sawmill on land in the BCR Industrial site, which Brink hopes will be up and running in early 2006.

However, Brink said he has run into difficulties getting access to timber even though the amount of logging has significantly increased because of the mountain pine beetle epidemic.

Brink said the problem is the B.C. government has tied new timber rights to creating products other than lumber because of the continuing softwood lumber fight with the U.S.

However, timber rights for a sawmill tied to the secondary manufacturing sector makes sense, since half of the lumber would be pushed up the value-added chain, said Brink. "Obviously, we have not been overly happy with forest policy that has been very punitive to secondary manufacturing," he said.

The sawmill would create about 100 jobs, and also allow the resumption of production at a lumber remanufacturing plant in Prince George, which would employ another 100 workers, said Brink.