Western Forest Products (WFP), the parent company to the Woodfibre pulp mill south of Squamish, is curtailing some sawmills and making moves to avoid laying out a huge amount of cash at the beginning of next month.
WFP is deferring an interest payment and halting logging and saw milling operations for the summer.A planned maintenance shutdown at Woodfibre is being rescheduled. The original plan was to do the maintenance work this month, but manager Bob Ringrose said to help ease the parent company's cash crunch, the mill is scheduled to shut down between Aug. 15 and 25.
"We had an awful lot of payments to make on the fist of July," Ringrose said. "Every one of our divisions has to pay municipal taxes and the unions get their holiday pay on the first of July."
Ringrose said the maintenance shutdown is an expensive operation for the company at a cost of $8 to 9 million. The 296 Woodfibre employees will all be involved in the maintenance work, plus a few hundred contractors will be employed over the course of the shutdown.
Delaying the maintenance work by two months allows the company to defer the huge bill for the maintenance work at the mill on Howe Sound and help WFP better manage its cash flow.
The move won't have any significant negative impact on the Woodfibre employees, but WFP loggers on Vancouver Island will start getting lay off notices starting in July.
According to a WFP news release, the company is making these moves in response to lower than expected sales and to reduce the amount of cash tied up in log and lumber inventories.
"Taking this downtime should enable us to reduce our log and lumber inventories by approximately $40-$50 million," said Reynold Hert, the WFP president and CEO.
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