Chinese markets boost Western Forest Products

Ladysmith’s Western Forest Products mill has been helping fill the need for construction lumber in China. The mill, which closed in April 2008, re-opened in September 2010 with a crew of 35 hourly workers and five regular staff. According to documents from Western Forest Products, the company invested $1.5 million on maintenance, labour, supplies and upgrading equipment between July and September of 2010. Gary Ley, spokesperson, said the mill has been running smooth and safe since the start-up and the company is pleased with how well things have been running. “Employees are clearly committed and working hard,” said Ley. Ley said the company is optimistic for the year, but noted logging is difficult right now given the winter conditions. “It’s the standard problem of trying to do logging in the winter on Vancouver Island,” said Ley. “Logging in the winter has curtailed because of the conditions … log supply can be stop and start at times.” Ley said Western Forest Products exports about five per cent of their raw logs for milling elsewhere and the rest are processed in B.C. “What we’ve been able to do through exports is keep a lot of people working in the woods to produce those logs. “It’s been a consistent part of our business, but at a low level.” Ley said the Ladysmith mill is currently producing hemlock products for construction framing in China. And while there may have been a few upgrades and kinks to be worked out when the mill once again became operational, their buyers are pleased with the products. Ley said his company is pleased with the B.C. government in their efforts to open up the overseas market to B.C. wood. Ley said representatives from Western Forest Products have been on trade missions to China. The Chinese market, Ley said, accounts for around 30 per cent of the company’s market, taking up most of the demand that dropped after financial turmoil left many markets uncertain. “A lot of the commodity product that we were making for the U.S. housing industry … we’ve been able to shift that to China.” The other 70 per cent is shipped around North America and Europe. But Ley said the company has high hopes for year despite some possible setbacks. “We’re relatively optimistic for the year, the forecast is generally good … but the U.S. recovery is very slow. “We expect that China will continue to be a healthy market and we are going to do everything we can to try to expand that for us.” Ley said Western has come through the financial down turn well and has posted four straight growth quarters and said around 200 more people are back to work with the company compared to a year ago. Western Forest product has been cutting around 40 million board feet annually with one shift ranging in size from 40mm x 70mm to 90 mm, 143mm, 190mm and 241mm (roughly 2 x3, 4, 6, 8, 10 in.). The Ladysmith mill reached its budget after the second week and has continued to make budget since. For 2011, the annual payroll is $3 million, operating and maintenance supplies equal $3 million and property taxes are around $410,000.

Editor’s note: It has since been clarified by Ley that the $410M figure listed on their fact sheet, means $410,000

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