Shift to a leaner operation will also reduce
environmental footprint
VANCOUVER, BC, April 5,
2022 /PRNewswire/ - West Fraser Timber Co. Ltd.
("West Fraser" or the "Company") (TSX and NYSE: WFG) announced
today that it will permanently reduce capacity at its pulp mill in
Hinton, Alberta ("Hinton Pulp") by
the end of this year. One of Hinton Pulp's two production
lines will shut, and the remaining line will produce Unbleached
Kraft Pulp ("UKP") rather than Northern Bleached Softwood Kraft
Pulp ("NBSK").
"Hinton Pulp has been in operation since 1956 and these changes
are necessary to simplify our operation, reduce capital
requirements and greenhouse gas emissions, and better align with
consumer expectations," said Ray
Ferris, President & CEO, West Fraser.
The capacity reduction will see staffing levels transition from
345 positions to 270. West Fraser expects to mitigate the
impact on employees through natural attrition, retirements and by
offering employment opportunities at other West Fraser
operations.
"Our Hinton Pulp team has been engaged in a comprehensive review
process and I want to thank them for their creativity and
commitment to the mill, our customers and the environment. We
remain strongly committed to the community of Hinton, the future of the plant, and to our
neighbouring lumber operation, Hinton Wood Products," said
Ferris.
The environmental benefits of moving to a single UKP production
line include:
- an estimated 35% reduction in greenhouse gas emissions
("GHGs"), which is equivalent to taking approximately 19,900 cars
off the road per year
- an estimated 25% reduction in water use, air emissions and
waste generation, and
- elimination of chlorine dioxide emissions
As the world moves away from single-use plastics, UKP is
now used increasingly in a wide variety of everyday items including
cardboard packaging, grocery bags, fibre-cement board and specialty
products.
Since late 2021, the mill has undertaken several product trials
and received positive initial customer feedback as to the quality
and strength of the pulp produced. Currently, mill employees
are preparing for the transition after satisfying all existing
customer commitments for NBSK.
It is anticipated that an impairment charge of approximately
US$13 million will be recorded in
West Fraser's first quarter 2022 results associated with the
write-down of equipment that will be decommissioned permanently as
part of the transition to UKP.
About West Fraser
West Fraser is a diversified wood products company with more
than 60 facilities in Canada,
the United States, the
United Kingdom, and Europe. From responsibly sourced and
sustainably managed forest resources, the Company produces lumber,
engineered wood products (OSB, LVL, MDF, plywood, and
particleboard), pulp, newsprint, wood chips, other residuals, and
renewable energy. West Fraser's products are used in home
construction, repair and remodelling, industrial applications,
papers, tissue, and box materials. For more information about
West Fraser, visit www.westfraser.com.
Forward-Looking
Statements
This news release contains forward-looking information or
forward-looking statements (collectively, "forward-looking
statements") within the meaning of applicable securities laws,
including those relating to the Company's plans to reduce the
capacity at Hinton Pulp through decommissioning and transition from
NBSK to UKP by the end of the year and our ability to meet the
related objectives including simplifying operations, reducing
capital requirements and GHG emissions and better aligning consumer
expectations, expectations around the reduction of Hinton Pulp's
environmental footprint and related environmental benefits,
expectations on employee staffing levels and related mitigation
strategies, and expectation around the financial impact in West
Fraser's first quarter 2022 results of the decommissioning and
transition to UKP. Any such forward-looking statements are
based on information currently available to us and are based on
assumptions and analyses made by us considering our experience and
our perception of historical trends and current conditions and are
subject to inherent risks and uncertainties including our ability
to undertake the required capacity reductions within the time
period specified, and realize the expected benefits therefrom
described in the news release, including achieving the
environmental benefits. Readers should also refer to the risk
factors set forth in the Company's annual information form and
management's discussion and analysis for the year ended
December 31, 2021, each dated
February 15, 2022, available at SEDAR
(www.sedar.com) and EDGAR (www.sec.gov/edgar.shtml). There
can be no assurance that the plans, intentions, or expectations
upon which forward-looking statements are based will be realized.
Actual results may differ, and the difference may be material
and adverse to the Company and its shareholders. Except as
may be required by law, the Company undertakes no obligation to
publicly update or revise any forward-looking statements.
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SOURCE West Fraser Timber Co. Ltd.