Canfor announces the permanent closure of the Polar sawmill and the suspension of planned reinvestments in Houston, BC

VANCOUVER, B.C, May 9, 2024 /CNW/ – After thorough analysis of the ongoing shortage of commercially available timber and difficult operating conditions in the North British ColumbiaCanfor Corporation (TSX:CFP) today announced the permanent closure of its Polar sawmill in Bear Lake, B.C and the suspension of its planned reinvestment in Houston, B.C. This follows the announcement by our subsidiary Canfor Pulp that a production line at the Northwood Pulp Mill will be suspended indefinitely.

The Polar sawmill, which has a production capacity of about 300 million board feet per year, has since been curtailed January 2024. Around 180 employees are affected by the permanent closure.

Don KaynePresident and CEO of Canfor Corporation, today issued the following statement:

“The ability to reliably access enough economical timber to power our production facilities is critical to our business. Unfortunately, while our province has an adequate supply of timber for harvest, as confirmed by the allowable annual cut set by the Chief Forester of BC, the actual harvest level has declined dramatically in recent years. In 2023, the actual harvest was 42 percent below the allowable cut, a level not seen since the 1960s.

While this decline is partly due to natural disturbances – particularly beetle infestations and wildfires – it is also the result of the cumulative effects of policy changes and increasing regulatory complexity. These decisions and changes have impacted our ability to consistently access sufficient economic fiber to support our manufacturing facilities and have forced the closure or curtailment of many operations in the forestry sector, including our Polar sawmill.

As the political and regulatory landscape in British Columbia continues to change, it is difficult to predict future operating conditions. For this reason, we have made the difficult decision to put our plan to build a new state-of-the-art sawmill on hold Houstonas we are not convinced that an investment of this magnitude can be successful at this time.

These decisions are heartbreaking for our company, which has been proudly headquartered in BC for more than 85 years. More importantly, these decisions have a profound impact on our employees, partners, contractors, customers, suppliers and First Nations communities that rely on healthy forestry.

In the coming weeks, we will work with our union partners to develop a transition plan that includes severance provisions and other measures to support our affected employees. We will also look for opportunities to divest our associated term to support other local manufacturing operations facing the same challenges accessing fiber in hopes of preventing the closure or curtailment of another operation.”

Forward-Looking Statements

Certain statements in this press release constitute “forward-looking statements” that involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Words such as “expects,” “anticipates,” “projects,” “intends,” “plans,” “will,” “believes,” “seeks,” “estimates,” “should,” “may,” “could.” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs and actual events or results may differ materially. There are many factors that could cause actual events or results expressed or implied by such forward-looking statements to differ materially from any future results expressed or implied by such statements. Forward-looking statements are based on current expectations and Canfor undertakes no obligation to update such information to reflect subsequent events or developments, except as required by law.

About Canfor Corporation

Canfor is a leading global manufacturer of high-quality, low-carbon forest products, including lumber and specialty lumber, engineered wood, pulp and paper, wood pellets and green energy. Proudly headquartered in Vancouver, British ColumbiaCanfor produces renewable products from sustainably managed forests in more than 50 facilities across its diversified operating platform Canada, The United States And Europe. The company has a 70% stake in Vida AB. Sweden largest privately held sawmilling company and also owns a 54.8% stake in Canfor Pulp Products Inc. Canfor shares trade on the Toronto Stock Exchange under the symbol CFP. For more information, visit canfor.com.

SOURCE Canfor Corp

For further information: Media Contact: Mina Lauden, VP, Corporate Affairs, (604) 661-5225, (email protected); Investor Contact: Pat Elliott, CFO and SVP, Sustainability, (604) 661-5441, (email protected); Dan Barwin, Director, Corporate Finance, (604) 661-5390, (email protected)