After West Fraser’s Nov. 13 announcement that its third sawmill shift in both Quesnel and Fraser Lake would be permanently shut down from January 2019, the Observer caught up with Brian Balkwill, vice president of Canadian Wood Products, to obtain more details on the layoffs.
Balkwill said the change will be permanent after January, and is due to log shortages, rather than the market. He told the Observer that West Fraser had increased its production and harvesting to salvage timber affected by the Mountain Pine Beetle while it was still viable, always knowing it would mean reducing production later on.
“The logs are no longer available to sustain the mills at the current production level. We are dropping back down so essentially our production levels in the mill will match the timber supply. That’s our strategy. It’s not about short-term markets. … It’s more about trying to match our production capacity with the available timber,” he said.
He said the increase in log price as the timber supply drops has meant that it’s not economically viable for the company to travel farther distances outside the timber supply area to get logs.
The third shifts in the Quesnel and Fraser Lake sawmills will be shut down as of Jan. 14, 2019, affecting 50 workers in Quesnel and 40 in Fraser Lake. Balkwill said the additional workers affected (25 in Quesnel and 20 in Fraser Lake) will be in the planer mill, and these shifts will be curtailed once the crews run though the inventory.
“It’ll be weeks after [Jan. 14] that we’ll continue on three shifts [in the planer mill] until we get our inventory level where we want it to be. It’ll probably be the end of the first quarter, into the second quarter, where we’ll have our inventory back where we want it to be.”
West Fraser said in its Nov. 13 press release that it hopes to offer the 135 affected employees jobs at other divisions within the company. Balkwill said it will be easier for employees to remain in their community in Quesnel, with the company having two pulp mills, an MDF plant, plywood plant and sawmill in town.
“That will increase our ability to have people take on positions in those plants,” he explained.
“In Fraser Lake, we only have the one facility, so the opportunities for people to do something in Fraser Lake with our company will be limited, so they’ll be looking at opportunities at our other divisions in B.C. or Alberta.”
He said as long as employees are willing to relocate, West Fraser has committed to finding positions 135 workers.
As to the future, Balkwill said he’s hopeful these production cuts will bring the company back in alignment with log supply so that no further cuts are needed.
“We will continue to look at it as the markets change … there are a lot of things that impact available timber supply. It’s tough for me to say this is the end, but at this time we don’t have any other plans [for cuts],” he commented.
West Fraser supplies lumber to the Canadian and U.S. markets, as well as China and Japan.
The news of West Fraser’s production cuts comes after Quesnel’s Tolko Questwood division shut down operations in mid-October. Tolko cited high log costs and poor market conditions as the reason for the decision.
Conifex in Fort St. James will also be shut down for at least four weeks as of Monday this week (Nov. 12). Canfor’s sawmill in Prince George has also curtailed production at its sawmill.
West Fraser sawmills in Quesnel and Fraser Lake will be eliminating the third shift at each sawmill to reduce lumber production, according to a news release dated Nov. 13.
The curtailment of approximately 300 million board feet of combined lumber is expected to impact around 75 employees in Quesnel and 60 in Fraser Lake over the first and second quarter of 2019.
The company said in a news release it expects to mitigate the impact on affected employees by offering them work opportunities at other West Fraser operations.
West Fraser attributed the cuts to the B.C. timber supply shortage after the Mountain Pine Beetle infestation.
“Today’s decision better aligns West Fraser’s production with current timber supply,” said the release.