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Tariffs, supply and soaring loonie hamper lumber remanufacturers
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by GORDON HOEKSTRA Citizen staff
Lumber remanufacturers in the Northern Interior are holding on in the face of punishing U.S. tariffs and a higher-than-normal loonie, but some firms are becoming increasingly worried about their raw material supply.
Brink Forest Products owner John Brink views it as a key issue, particularly with the prospective merger of Canfor and Slocan.
Brink continues to operate his plant in Prince George that employs more than 100 workers, but is concerned about his supply of raw material. He currently has an arrangement with Canfor, but is uncertain whether it will continue.
Brink said he believes there should be a preference for low-grade lumber and trim ends to be made available to local secondary manufacturers, noting the product can be shipped elsewhere.
Lumber remanufacturers purchase low grade lumber and trim ends from sawmills, then re-cut and glue them together to create finger-jointed lumber. The lumber remanufacturers try to make arrangements with sawmills in the region to buy a steady supply. However, if the lumber remanufacturer can't make arrangement with local sawmills, there's little ability to go farther for raw materials, for example to Alberta or southern B.C., because of transportation costs.
"It comes down to a question of what kind of relationship will primary producers have with secondary manufacturers here," said Brink.
Canadian Woodworks president Arnold Zwiers also says raw material supply is a primary issue. The combination of the tariffs, higher Canadian dollar and supply shortages has forced Canadian woodworks to significantly cut back its production.
The plant is now operating on a reduced one-shift basis, sometimes running less than five days a week. "It's a real challenge out there," observes Zwiers. "If you have a good reliable supply, you'll be more competitive, operating more shifts and more hours."
Vanderhoof Specialty Wood Products continues to operate at the same level it has for the past two or three years, employing 75 people, but is also hurting from the challenges of the tariffs, higher Canadian dollar and raw material supply.
Vanderhoof Specialty president Paul Heit said while they're hanging on, they would be able to double output if they could access more supply.
East Fraser Fiber -- which has remanufacturing plants in Mackenzie and Williams Lake -- is also hurting from the tariffs and higher loonie, but continues to run flat out as lumber prices have increased recently.
East Fraser president Jerry Deere said they don't have a problem with raw material supply.
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