BusinessFebruary 11, 2004

Mill can churn out 600 million board feet a year

Associated Press

HOUSTON, British Columbia -- Canfor Corp. has opened the world's largest sawmill, a state-of-the-art operation designed to blunt the impact of softwood duties and a stronger Canadian dollar.

The mill's annual production capacity is 600 million board feet, eclipsing the next largest, a sawmill owned by Fritz Klausner in Germany with a capacity of 475 million board feet, said Russ Taylor & Associates, a Vancouver-based forest industry consultant.

A 2,000-square-foot-home typically uses nearly 16,000 board feet of lumber, and the super sawmill in this central British Columbia town could produce twice the wood needed for all housing starts in the province last year, provincial Premier Gordon Campbell said.

It will produce value-added dimension lumber for housing construction and big-box home supply stores such as Home Depot and Lowe's in the United States.

"These mills are part of our future in British Columbia," Canfor chief executive David Emerson said after the ribbon cutting Monday.

Built from a smaller mill in an overhaul that cost $19.8 million (U.S.), the super sawmill is part of a global "bigger is better" trend in the forest industry that threatens operators of smaller mills who may find it increasingly difficult to get raw logs for processing, observers said.

Smaller independents may have to find a specialty niche to survive, Emerson said.

"The market is changing," he said. "This investment is to ensure that we become more competitive in the global marketplace."

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Canfor, based in Vancouver, is the corporate parent of Canadian Forest Products Ltd. and has nearly 6,300 employees at forest and manufacturing operations in British Columbia, Alberta, Quebec and Washington state.

Analysts said U.S. duties on Canadian softwood have added pressure on industry giants such as Canfor and Weyerhaeuser Co. to use economies of scale to cut the cost of producing dimension lumber.

Weyerhaeuser spokeswoman Sarah Goodman would not comment on reports that the company based in Federal Way, Wash., is planning a super sawmill in Kamloops, B.C., but said the trend in the province is "scaling up."

Weyerhaeuser closed a mill at Vavenby, near Kamloops, and now produces the same volume of wood with three mills in the region instead of four.

"It seems that the way of the forest industry these days is to be bigger and better," said Laurie Cater, publisher of Madison's Canadian Lumber Directory, a newsletter in Vancouver that tracks wood prices.

She attributed the growth of super sawmills largely to advances in computer technology and industry consolidation that ensures a long-term supply of logs.

With computerized scanning and other technology, mill managers can adjust their cuts to take advantage of price fluctuations for various types of lumber.

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