December 24, 2012

Mill slated for $40 million in upgrades

Canfor Corporation is moving forward with a $40 million capital investment in its Elko sawmill, located in the Kootenay region of British Columbia.

“These investments are aligned with our strategic investments in our Kootenay assets, and are necessary to ensure our Elko facility can operate competitively in all market conditions,” said Don Kayne, president and CEO of Canfor Corporation.

The investment will include upgrades to the sawmill, increased kiln drying capacity, as well as the construction of a greenfield planer mill complex.

The Elko capital project is scheduled to start in the first quarter of 2013 and should be completed in the third quarter of 2013.

Canfor bought the Elko sawmill and another mill in Canal Flats in a $60 million deal for the Southern Interior assets of Quebec-based forestry company Tembec.

The deal for the two mills was announced last year and closed in March.

This investment is part of a multi-year capital investment program aimed at enhancing productivity across the company.

For example, Canfor reopened its operations at Radium Hot Springs, B.C. on Oct. 29, following a $38.5 million capital investment to build a new planer mill and install a biomass energy plant.

The biomass energy system uses wood waste or hogg fuel from processing to heat oil to dry lumber, which has just been cut.

Hogg fuel is a mixture of bark and sawdust.

The new drying system replaces the cost of propane to dry wood, which creates a significant cost improvement over propane.

The capital project at the Radium mill began in May and involved a new lumber infeed and strip system, planer machine, tramline and stackers.

It started up in the fall of this year.

Capital spending in the lumber segment for 2011 was $155 million and included a major sawmill and planer rebuild at Vavenby ahead of the mill’s restart, a major planer rebuild at the Polar sawmill, energy systems at Plateau and Chetwynd and the purchase of an energy co-generation plant at Grande Prairie.

Over the last three years, the company has invested $372 million in its facilities in B.C.

The reopening of the Vavenby and Radium mills resulted in the creation of 305 direct jobs. Canfor is the largest forest company in B.C., directly employing more than 3,500 people in the province.


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