Canfor Corporation announced Monday the permanent closure of its historic Rustad sawmill in Prince George and Tackama mill in Fort Nelson.
The announcement followed a lengthy indefinite shut that resulted from the collapse of the United States residential housing market in 2008.
According to Canfor, the forest company determined that the capital investment needed to bring the Rustad facility up to globally competitive operating standards would be prohibitive. Instead the company has focused a $300 million, three-year capital investment plan on other facilities where smaller amounts of capital spending could realize significant improvements in cost performance and capacity.
Canfor acquired the Rustad sawmill in 1999, and operated the facility for 10 years until slowing U.S. lumber demand forced operations to cease in 2009. To that point, the mill had been in continuous operation for 62 years. The Tackama operation in Fort Nelson was part of Canfor's 2004 acquisition of Slocan Forest Products, and at the time was B.C.'s largest plywood facility.
Although the decision has been made to cease manufacturing operations at these locations, Canfor is proud to have been part of the impressive legacy both plants had in their communities. Further information will be available over the next several weeks on plans to repurpose portions of the Rustad site for trades training and education.
"Canfor remains fully committed to the B.C. Interior, the communities of Prince George and Fort Nelson and to our employees," said CEO Don Kayne. "The Province of British Columbia, Government of Canada and B.C. forest industry are seeing tremendous success in the joint effort to develop new markets for B.C. wood products throughout the Asia Pacific. We believe that demand for green, environmentally sustainable building materials will continue to grow in our core United States market and around the world, and that a bright and prosperous future is ahead for the B.C. forest sector and forest communities."
Rustad and Tackama employees will receive statutory payments and severance as negotiated with the United Steelworkers.
Canfor reopened its Vavenby sawmill last September after a two-year shutdown due to poor markets. This week it went from one shift to two at the operation, with a second shift to start at the planer mill in January. The company expects 145 employees will be at work once Canfor-Vavenby is fully operational.