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Vol. 12, Issue 9, October 27, 2007
Wawa OSB plant closure a direct impact on Chapleau’s economy
T
he recent OSB short notice plant closure in Wawa will have a direct effect on Chapleau’s economy. C h a p l e a u ’s local trucking companies who haul poplar to the plant will be directly impacted along with Tembec who supply them with a percentage of their log supplies. In response to slow customer d e m a n d , We y e r haeuser Company announced that it would indefinitely
curtail oriented strand board plants in D r a y t o n Va l l e y , Alberta, and Wawa, Ontario, and a laminated strand lumber plant in Deerwood, Minn., before year-end 2007. "The decline in North American housing starts has reduced demand for wood products, requiring us to rationalize our supply of OSB and engineered wood," said Steven R. Rogel, chairman, president and chief executive officer. "We
remain committed to these markets. This move enables our remaining plants to better execute our customer strategies." "These difficult decisions are not a reflection on the hard work of our employees,” The company will provide the affected employees with severance pay as well as job-transition services and counseling, consistent with company policy.
"These difficult decisions are not a reflection on the hard work of our employees," Rogel said. "They are the result of today's challenging business environment, and part of an ongoing effort to strengthen We y e r h a e u s e r ' s overall portfolio to enhance shareholder value." The Wawa and Drayton Valley plants are two of nine OSB mills in the Weyerhaeuser system. Wawa has 132 employees and an
annual production capacity of 470 million square feet of OSB. Drayton Valley has 130 employees and capacity for 415 million square feet annually. The adjacent sawmill at Drayton Valley will continue to run. The Deerwood plant produces engineered strand lumber, with 158 employees and a capacity of six million cubic feet per year. The plant is one of three such company operations. Weyerhaeuser
Company, one of the world's largest forest products companies, was incorporated in 1900. In 2006, sales were $21.9 billion. It has offices or operations in 18 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities.
'Made in U.S.A.' wood now showing up in Canada By Gordon Hamilton, Vancouver Sun
American lumber companies who have long complained about high-volume, low-cost Canadian producers ruining their market, have started shipping wood into Canada.
Long Term Forecast Saturday High 6 Low 3 Sunday High 3 Low -5 Monday High 4 Low -4 Tuesday High 3 Low -6 Wednesday High 2 Low -2 Thursday High -1 Low -1
In a turnaround that is as much a symptom of the depth of economic despair in the U.S. as it is a statement on the highpowered Canadian dollar, wholesalers report that they can buy cheaper wood from U.S. mills than they can from Canadian producers. Volumes are still small, but the irony of American lumber showing up in Canada - the "hewer of wood" for the North American market - is not lost on Laurie Cater, of the trade journal Madison's Canadian Lumber Reporter. "Right now the market is so bad on the U.S. side that they will bend over backwards to establish a relationship with Canadian buyers, particularly knowing how hot our housing
market is. Our market is much smaller, but it is active," Cater said Friday. With American annual housing starts at a 14-year low of 1.19 million, the confidence index of American home builders at its lowest reading ever, and sawmill producers engaged in a battle to see who will be the last to shut down, North America is awash in unsold lumber. It's no surprise that American wood is now showing up in Canada, said John Allan, president of the B.C. Council of Forest Industries. "It's a reflection of an overall unhealthy financial situation," Allan said. "We are going to see production flowing in every direction imaginable." He said taxes imposed on U.S.-
bound lumber, the high Canadian dollar, and the U.S. housing collapse have resulted in Interior producers directing more of their output to Eastern Canada to compensate for reduced U.S. shipments. One year ago this month, Canadian producers began paying a lumber tax to placate unfounded American complaints t h a t C a n a d a subsidized lumber, ending a 25-year-long
American campaign against this country's sawmillers. At that time, the Canadian dollar was trading around 85 cents US. It closed Friday above $1.03 US. Canadian building products w h o l e s a l e r Ta i g a Forest Products normally exports to the U.S., but is currently shipping nothing because of the imploding U.S. housing market, said lumber sales manager
Bob Leffler. The much smaller Metro Vancouver market, which is still robust, is suddenly appearing more attractive to U.S. sawmillers. "We are able to bring in product from Wa s h i n g t o n s t a t e cheaper than we can from other [domestic] areas," Leffler said. "The whole thing has turned around. It's really ugly," he said, referring to the North Cont’d on P.3
Brown to assist Wawa and area in coping with Weyerhaeuser closure A L G O M A MANITOULIN Mike Brown, MPP for Algoma-Manitoulin, expressed his disappointment upon learning that Weyerhaeuser will be indefinitely closing its oriented strand board
plant in Wawa. Weyerhaeuser announced the decision on Thursday, citing market conditions as the reason for the closure. “ F o r c e s beyond the government’s control have
brought about this closure,” stated Brown. “I will work with community and business leaders in the area to bring in as much assistance as possible from the province.”