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'Extremely difficult': Conifex selling Fort St. James sawmill

Hampton Lumber will pay Conifex close to $39 million in the sale
The Conifex Fort St. James Sawmill. (via Conifex)

Conifex Timber has entered into a purchase agreement with Hampton Lumber for the sale of their Fort St. James sawmill and the forest license associated with it, the company announced yesterday (June 24).

In a news release, Conifex says the purchase price is close to $39 million along with the market value of any finished lumber and log inventory at closing. 

Ken Shields, chair and CEO of Conifex, says the company knew changes would be inevitable with a struggling lumber industry. 

"We have known for some time that lumber industry rationalization is inevitable because too little sawlog supply is available to maintain the existing manufacturing base in the Interior region of B.C.," he says. "The decision we have taken to sell the mill was extremely difficult; however, we are encouraged by Hampton’s plans for the site. We believe this transaction supports the province’s objectives for industry rationalization that is mindful of the impacts on people, communities and First Nations. We sincerely thank our employees, contractors and other stakeholders for their hard work and contribution to the site over the past decade."

Hampton Lumber currently has nine sawmills operating in Oregon, Washington and British Columbia, with two being in the Burns Lake area.

With the Conifex sawmill closing, the company says it intends to build a new mill in Fort St. James. 

Hampton Lumber CEO Steve Zika says they are hopeful they can succeed despite the current challenging conditions. 

“While economic conditions are extremely challenging right now for the lumber industry in British Columbia, we believe the long-term outlook for Canadian lumber is promising," he adds in the release. "We intend to build a new sawmill in Fort St. James and look forward to building relationships with local First Nations and other community partners similar to a successful joint venture we have with the Burns Lake Native Development Corporation in the Burns Lake area.”

With the mentioned challenges in market conditions, Conifex will not continue normal operations at the sawmill before the transaction closes. 

The closure is subject to certain regulatory approvals, including approval of the Minister of Forests, Lands, Natural Resource Operations, and Rural Development and other conditions.

Conifex says money from the transaction will be mainly used to retire debt and to provide additional liquidity to help better and optimize performance and value at its other locations.

Editor's note: The headline in this story was updated at 5:30 p.m. on June 25.


Jess Fedigan

About the Author: Jess Fedigan

Jess Fedigan graduated from BCIT’s Broadcast and Online Journalism program in 2016 and comes from the Lower Mainland.
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