Tag Archives: Canfor

Canfor Corporation is reporting a net income attributable to shareholders of $61.9 million for the first quarter of 2013, compared to $21.31 million for the fourth quarter of 2012 and a shareholder net loss of $18.01 million for the first quarter of 2012.

The shareholder net income for the first quarter of 2013 included various items affecting comparability with prior periods as well as certain required IFRS accounting adjustments related to the company’s 50% interest in Canfor-LP OSB Limited Partnership, which had an overall positive impact on the company’s results of $8.4 million. After adjusting for such items, the company’s adjusted shareholder net income for the first quarter of 2013 was $70.3 million, up $50.0 million, from an adjusted shareholder net income of $20.3 million, for the fourth quarter of 2012, and an adjusted shareholder net loss of $24.1 million, for the first quarter of 2012.

Canfor reported operating income of $100.0 million (adjusted $111.0 million) for the first quarter of 2013, more than double the $49.0(1) million recorded for the fourth quarter of 2012.

Improved results reflected a strengthening U.S. housing market and improved operating performances at the company’s lumber and pulp mills. Lumber sales realizations experienced strong gains during the quarter, with both Western Spruce/Pine/Fir (SPF) and Southern Yellow Pine (SYP) products appreciating to levels not seen in almost eight years. The previous quarter results included a one-time accounting gain related to the company’s salaried post retirement benefit plans.

Commenting on the first quarter performance, Canfor’s President and CEO, Don Kayne, said, “We are encouraged by the stronger lumber markets and steady improvement in the U.S. housing market. Global pulp markets improved slightly as we saw some modest upward movement in prices ahead of the seasonally stronger spring period.” Kayne added that the company’s lumber and NBSK pulp mills saw significant uplifts in productivity as the quarter progressed. “We are seeing positive results from the significant capital improvements we have made in the last few years,” said Kayne.

Looking ahead, North American lumber consumption is forecast to improve slightly through the balance of 2013 as U.S. housing activity continues to gradually gain momentum. Canadian markets are anticipated to remain relatively slow due to tempered housing activity, while offshore markets are projected to see modest growth in demand and stable prices. NBSK pulp markets are projected to remain fairly challenging through the second quarter of 2013. Canfor Pulp announced an increase in the North American NBSK pulp list price of US$30 per tonne in April 2013.

Read more: 
Canfor Reports Results for First Quarter of 2013 (Canfor)

Snow and ice buildup is being blamed for the collapse of the roof on Canfor‘s J.D. Little Tree Nursery in Prince George, British Columbia this morning.

No one was inside the building when the roof over the cold storage cooler caved in, causing 2 walls to collapse.

16 million tree seedlings, worth about $3 million dollars, were inside.    Canfor was working today to find a safe way to save the seedlings and find a temporary home for them.

The roof was engineered to withstand snow loads, so it is unclear why the roof collapsed.  Another roof in Prince George also collapsed under the weight of snow this week.

WorkSafeBC has given Canfor permission to demolish the building.

Read more, and see photos:
Snow and ice buildup caves in 2 Prince George roofs (CBC)

Also see:
Investigation into tree nursery roof collapse underway (HQPrinceGeorge.com)

A Forest Practices Board audit of Canadian Forest Products Ltd. (Canfor) on Tree Farm Licence 48 in British Columbia’s Peace District found that forest practices complied with provincial forestry legislation.

“We are pleased to see that Canfor is following the requirements of the Forest and Range Practices Act and the Wildfire Act” said board chair Al Gorley. “Their activities were also consistent with the Dawson Creek Land and Resource Management Plan.”

TFL 48 is located near the communities of Chetwynd, Hudson’s Hope and Tumbler Ridge. The audit examined all harvesting, roads, silviculture, protection activities and associated planning done between August 2011 and August 2012.

Read the full report [.pdf]

The Forest Practices Board is B.C.’s independent watchdog for sound forest and range practices, reporting its findings and recommendations directly to the public and government. The board audits forest and range practices on public lands and appropriateness of government enforcement. It can also make recommendations for improvement to practices and legislation.

Canfor Corporation has reported a net income of $24.6 million in the fourth quarter of 2012 and $41.4 million in the 2012 fiscal year.

The net income attributable to shareholders is $21.6 million in the 4th quarter, and $32.1 million for the entire 2012 fiscal year.

Commenting on the fourth quarter performance, Canfor’s President and CEO, Don Kayne, said, “The improvement in lumber sales realizations reflected the encouraging continued growth in global demand for softwood lumber products.”

Kayne added that the company was continuing its focus on making high-return strategic capital investments as highlighted by the recently announced capital upgrades at its Elko and Mackenzie operations.”These two projects along with the start-up of our upgraded Radium mill early in the fourth quarter demonstrate our ongoing commitment to expand our capacity to provide high quality products to our customers,” said Kayne.

Regarding the pulp and paper segment’s fourth quarter results, Kayne said, “After last quarter’s challenges at the Canfor Pulp facilities, it was encouraging to see solid improvements in productivity, as well as some improvement in market conditions this quarter.”

For the full financial release, and comparable results from 2011, view:
Canfor Reports Results for Fourth Quarter of 2012

Canfor Corporation is proceeding with capital improvement projects totalling approximately $40 million to increase productivity and recovery at its sawmill in Mackenzie, British Columbia.

The investment will include modifications and upgrades to the sawmill, kilns and planer.

“Our fibre supply in the Mackenzie region is strong and this announcement reflects confidence in our ability to operate an internationally-competitive mill in this community,” said Don Kayne, President and CEO of Canfor Corporation.

The capital project will commence in January 2013. Completion is anticipated in November 2013.

This announcement brings the total dollar value of the company’s capital investments to ensure competitive operation of its British Columbia solid wood, pulp and paper facilities to $600 million over the last three years. The reopening of the Vavenby and Radium mills after significant capital investments resulted in the creation of 305 direct jobs, combined with significant downstream benefits to local economies.

Source: Canfor

Canfor Corporation will proceed with capital investments totaling an estimated $40 million in its Elko sawmill, located in the Kootenay region of British Columbia.

This investment is part of a multi-year capital investment program aimed at enhancing productivity and cost performance across the company.

The Elko investment will include upgrades to the sawmill, increased kiln drying capacity as well as the construction of a greenfield planer mill complex.

The Elko capital project will commence in Q1 2013, with anticipated completion in Q3 2013.

“These investments are aligned with our strategic investments in our Kootenay assets, and are necessary to ensure our Elko facility can operate competitively in all market conditions,” said Don Kayne, President and CEO of Canfor Corporation.

Source: Canfor

Canfor Corporation has entered into a Letter of Intent with Louisiana-Pacific Corporation (LP) to sell Canfor’s 50% share in the Peace Valley Oriented Strand Board (OSB) joint venture in Fort St. John, B.C.

By completing this sale, LP will become the sole owner of the Peace Valley OSB mill.

“This transaction is part of Canfor re-profiling our assets to focus on lumber, pulp and paper manufacturing” stated Canfor President and Chief Executive Officer Don Kayne. “We have enjoyed a very positive relationship with LP and will continue to provide fibre resource management for the Peace Valley facility.”

The purchase price is estimated at $75 million CDN including working capital. In addition, Canfor may receive additional annual consideration over a 3 year period based on Peace Valley OSB’s annual EBITDA.

Canfor and LP currently jointly run the mill, with LP providing operational support while Canfor provides labour, fibre resource management and administrative services. Canfor will continue to provide fibre resource management and temporarily provide administrative services during the transition.

The completion of this transaction is expected to occur by the end of this year, but is subject to the parties executing a definitive agreement and customary regulatory approvals.

The Peace Valley mill has an annual production capacity of 820 million square feet of OSB. It currently operates three shifts with plans to add a fourth shift in the first quarter of 2013 depending on market conditions.

Source: Canfor Corporation

Canfor Corporation officially reopened its operations at Radium Hot Springs, B.C. this week.

This reopening is following a $38.5 million capital investment to upgrade the sawmill and build a new planer mill.

When the mill is running at full capacity in 2013, it is expected to produce 240 million board feet annually and directly employ 144 people.

“This investment shows how optimistic Canfor is about the future of our industry and this region,” Canfor President and CEO Don Kayne said at the official reopening event  today.

“The mill has been totally reconfigured so it can produce high-quality lumber products for customers around the globe, and do so efficiently and competitively.”

“Today is a dream come true for our village and the entire Columbia Valley,” said Radium Mayor Dee Conklin. “I want to congratulate Canfor for its vision, and thank Don Kayne and his team for delivering this long-term commitment to our community.”

“This is clear evidence of the success of innovative and progressive measures British Columbia has taken to strengthen our forest industry,” Forests Minister Steve Thomson said. “Our government, in partnership with the Canadian government and the BC forest industry, has developed new markets and increased demand for our forest products – leading to jobs and economic benefits for families in communities like Radium Hot Springs.”

Radium Hot Springs, a village of about 800 people located in the East Kootenays, is named after the hot springs in nearby Kootenay National Park. A popular tourist destination, its economy is also closely linked to the forest industry.

Source: Canfor

Canfor Corporation has posted a net income of $20.7 million in its third quarter of 2012 on sales of $683.8 million.

Operating income was $22.3 million for the third quarter of 2012, down $3.7 million from $26.0 million for the second quarter. The negative variance primarily reflected a significant weakening of Northern Bleached Softwood Kraft (“NBSK”) pulp markets and one-time restructuring costs which were largely offset by improved results in the lumber and panels segments, where solid demand supported higher sales realizations.

Lumber markets improved moderately in the third quarter of 2012, reflecting further stabilization of underlying demand in both North American and offshore markets. U.S. housing activity continued the upward trend seen in the prior quarter, with housing starts for the quarter averaging 786,000 units SAAR (seasonally adjusted annual rate), up 7% from the previous quarter. Canadian housing starts were down 3% from the previous quarter, to 223,000 units SAAR, and up 8% from the third quarter of 2011 when starts were 206,000 units SAAR. Market conditions in China continued to reflect solid demand. Demand in Japan also remained solid through the quarter. Global softwood pulp markets weakened through the summer months, with price erosion occurring for most of the quarter.

The average North American benchmark Western Spruce/Pine/Fir (“SPF”) 2×4 #2&Btr price rose 2% to US$300 per Mfbm, with slightly higher increases seen for most wider SPF products. The export tax on Canadian shipments to the US averaged 8% in the third quarter of 2012, down from a 13% average in the previous quarter. Southern Yellow Pine (“SYP”) prices saw similar increases to SPF in 2×4 benchmark pricing but prices for wider products were down over the quarter. For NBSK pulp US dollar sales realizations fell with the average North America list price down US$47 to US$853 per tonne, as challenging markets resulted in downward pressure on prices. Canadian dollar sales realizations across all solid wood and pulp products were negatively impacted by an average 1.5% strengthening of the Canadian dollar.

Lumber production and shipments were down 2% from the previous quarter, principally reflecting less operating time as a result of annual maintenance shuts at the company’s southern pine operations and the observance of one additional statutory day in the third quarter. Lumber unit manufacturing costs were up slightly from the previous quarter, with the positive impact of higher productivity offset by higher unit log costs resulting from market-related stumpage increases and wet weather conditions in the US South, the latter tightening log supply for part of the quarter. Pulp manufacturing costs were up slightly from the previous quarter due to one-time costs of $3.2 million associated with new five year collective labour agreements, partially offset by the impact of higher production volumes.

Pulp shipment and production levels for the third quarter reflected a scheduled capital and maintenance outage at Canfor Pulp’s Prince George Pulp Mill in the quarter, partly offset by higher production at the Northwood Pulp Mill following the unscheduled recovery boiler-related outage from late May to early July. Both mills experienced slower than anticipated ramp ups in the period following the schedule and unscheduled outages.

The company ended the quarter with cheques issued in excess of cash on hand of $7.1 million and operating loans of $17.0 million, with a total of $354.3 million still available under its operating lines.

Commenting on the third quarter performance, Canfor’s President and CEO, Don Kayne, said, “The improvement in lumber sales realizations reflected a steady increase in construction activity in North America and continued solid offshore demand for Western SPF lumber products.” Kayne added that the company has now fully integrated its recently acquired operations in the south-east Kootenay region. “The start-up of our upgraded Radium mill early in the fourth quarter of 2012 will further boost our capacity to provide high quality products to our valued customers,” said Kayne. Regarding the pulp and paper segment’s third quarter results, Kayne said, “It was a tough quarter as our pulp business faced challenges presented by weaker markets and the Canfor Pulp facilities came out of an extended period of major maintenance and capital upgrades. The focus now is on getting these recently upgraded pulp mills achieving targeted operating rates.”

Looking forward, U.S. lumber consumption is projected to slow in the fourth quarter of 2012 with traditionally lower seasonal homebuilding activity. The Canadian housing market is forecast to follow a similar trend, with demand projected to level off towards the end of the year. U.S. home inventories are projected to remain relatively low aided by low mortgage rates and gradual appreciation in home prices. Shipments to the U.S. are projected to taper off as export taxes increase from 5% in October to 10% in November, but offshore lumber shipments to China, Japan and Korea are anticipated to offset any slowdown in North American shipments. In the pulp segment, Canfor Pulp has announced an increase in the NBSK pulp list price of US$20 per tonne in all regions in October.

Source: Canfor  (Read full release)

The idea to build a trades training centre at the former Rustad mill site in Prince George, British Columbia may no longer be in the works.

Canfor and BID Construction were working on a proposal to convert portions of the former Rustad mill site into a trades training centre.

The hope was that a skilled trade training centre would train new workers and allow current workers to upgrade their skills.

Originally Canfor and BID had hoped to start training students in January 2013.  Canfor and BID expected the land and buildings donated to the training centre would be valued at more than $10 million.  They said they needed a matching contribution of $10 million from the government to renovate the buildings to make education and instruction on the site possible.

British Columbia’s Minister for Jobs, Tourism, and Skills Training, Pat Bell, said an assessment is underway to see what post-secondary schools in the North require for facilities.

“The College of New Caledonia is looking at what their space requirements might be. There are some gaps that are necessary, particularly in the heavy duty mechanics program. Other areas there have been significant investments by this government in trades training facilities.”

Read more:
Trades Training Centre May Not Go Ahead (HQ Prince George)
Rustad Training Centre (Canfor’s CEO Don Kayne’s Blog)