Asian company buys sawmill

The company that is buying Skeena Sawmills is a subsidiary of a Chinese company heavily involved in real estate and construction, says the provincial cabinet minister who assisted as the deal was put together.

  • Apr. 27, 2011 2:00 p.m.

The company that is buying Skeena Sawmills is a subsidiary of a Chinese company heavily involved in real estate and construction, says the provincial cabinet minister who assisted as the deal was put together.

Jobs, tourism and innovation minister Pat Bell said the longer range goal is to have lumber produced by ROC Holdings Ltd. flow into the supply stream of its parent company in China.

“They build what they would call subdivisions but what we would call cities …. for 100,000 people,” said Bell last week following the April 4 announcement that West Fraser had found a buyer for its closed sawmill here.

Bell became forests minister in 2009 and began promoting B.C. wood to Chinese markets right away.

The market began to take off last year with China adding lumber as well as whole logs to its B.C. resource shopping list.

The demand for lumber in China has helped ease the decline in demand from the United States, a key consideration in having the provincial economy recover from the 2008-2009 recession.

Provincial projections now have China ready to surpass the United States as the dominant customer for BC lumber.

At the same time, more and more Chinese companies are now buying into BC resource companies to secure their supply lines, said Bell.

“Conifex with a mill in Fort St. James and now in Mackenzie is an example I use,” said Bell. “It is 20 per cent owned [by a Chinese company].”

Still, a situation such as Skeena Sawmills in which a Chinese company buys a mill facility and a wood supply outright is not that common in BC.

Bell also hints that the Skeena Sawmills deal is not the last that will surface in the northwest in the next while.

“This one’s exciting,” said Bell of the Skeena Sawmills sale. “But it’s not the end of good news in the region. There are files still active and there will be more good news on the forestry front.”

“A lot of the work we started two years ago is now going to pay off,” he added.

One relatively new area to explore with Chinese interests is an expansion of port capacity.

The growth in log and lumber exports as well as other resources bound for China and Asia is starting to outstrip port capacity, said Bell.

 

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