Canfor Corporation Endorses $160 Mln Investment at US South Sawmills

SEATTLE (Scrap Monster): Vancouver-based integrated forest products company Canfor Corporation has announced significant capital investment at its US South sawmills. The proposed investment is aimed at boosting the production capacity of the region’s sawmills. Canfor had started operations at US South region way back in 2006 by way of acquisition of New South Companies. Currently, the company owned 14 manufacturing facilities here.

According to company press release, the company’s board of directors has given approval for a $160 million capital investment plan that will increase the production capacity of US South sawmills by approximately 350 million board feet. In addition, the investment also promises additional job opportunities. The investments will span over a period of two years and is expected to complete by end-2019.

Canfor will spend on upgrading the mill facilities including modernization of sawmill and planer machinery. The company targets significant improvement in lumber production by increasing the mills’ drying capacity. It must be noted that Canfor is currently conducting a viability study on the possibilities of a greenfield facility with anticipated production capacity of around 250 million board feet. It expects the study to be completed by Q1 2018.

Earlier during the month, Canfor had announced investment of $8.8 million towards upgrades at its sawmill facility in Urbana, Union County which produces premium southern pine lumber. This includes the installation of a third continuous dry kiln. To cope with the increased drying capacity, Canfor had announced its decision to add a second shift of operations at the facility starting early next year, which in turn will create around 36 new jobs. Furthermore, the investment is expected to contribute significantly to the local economy and the surrounding communities. Canfor has spent approximately $7 million at Urbana during the past two years. Also, it intends to invest another 13 million through 2020.

A recent investment at three of the Canfor’s South Carolina facilities had added new kilns and additional shift of operations.

Canfor has announced marginal decline in shareholder net income, falling from $81.3 million in Q2 to $66.2 million during the third quarter of 2017. The operating income too reported decline from $131.0 million in second quarter to $105.4 million during the third quarter of 2017. The company reported lower operating earnings in both the lumber and paper segments.