Reduced demand for dimensional lumber in China has resulted in Western Forest Products closing its Ladysmith Sawmill effective Friday.
According to company spokeswoman Amy Spencer, the mill will be shut down temporarily.
“It really depends on the markets,” she said. “That particular mill produces dimensional lumber for China and we are experiencing some weakness over there right now. At this point, I can’t put a timeline on [the closure].”
The mill, which has 85 employees, is expected to continue to run some maintenance and shipping shifts, so it’s unclear how many employees will be affected.
The news was broken to staff Wednesday via internal memo.
Western’s other mill in Ladysmith, the Saltair mill, is not affected by the closure.
The news comes just as Western is about to permanently close its sawmill in downtown Nanaimo.
In October, Western decided to close the facility while investing $10 million to modernize its Duke Point mill, where it will add another shift. The 62 employees that had been working at the Nanaimo mill were to be offered jobs at other mills, including Duke Point. The idea behind the consolidation was to increase production at both the company's Duke Point and Saltair sawmills and reduce costs.
Because of the restructuring charges related to the closure of the Nanaimo division, Western’s income for the third quarter dropped to $2.7 million compared with $17.2 million for the same period a year ago. Western reported $8.1 million in charges related to the closure. Western saw an increase in revenue, with $262.1 million in the third quarter, up from $239.4 million at the same time last year. Earnings before interest, taxes, depreciation and amortization were $20 million, down from $27.6 million in the third quarter of 2013.
