Western Forest Products is banking on future business and $30 million to upgrade its mills in Nanaimo, Ladysmith and Chemainus.
Company executives and B.C. Premier Christy Clark made the announcement June 11 at Western Forest Products’ Duke Point mill. The investment is part of the company’s $125-million capital strategic investment program, announced in 2013, to remain competitive and help it gain access to new markets.
“Our strategy is to invest in the mills, make them extremely efficient, and then add more hours to our production facilities and that’s where we’ll see the job increase,” said Don Demens, Western Forest Products president and chief executive officer.
The company will spend $28 million to modernize the sawmill, planer mill and install new automatic grading technology at Duke Point. Of that, $17 million will be spent on the planer to allow the mill to start producing specialty products for Japan and “appearance” products for the North American, Chinese and other markets around the world, said Demens.
“It will make it the most efficient specialty-product planer on the coast of B.C.,” Demens said.
The remaining $2 million will be divided between its other central Island mills.
The investment comes at a time when prices are low and there is little demand from the new home construction industry in the U.S. For certain wood products there is strong competition in foreign markets from other lumber-producing countries.
“Markets over the last few months have been pretty challenging,” Demens said.
“We’ve seen a slow start to the building season in the United States and China has been a bit of a challenge, but on the long term we believe that there’s a resurgence in the U.S. home construction business. Continued strength in the repair and remodelling sector will drive the demand for lumber higher and we expect that will have an effect on all of our business.”
Clark was on hand for the investment announcement even though the government is not contributing to Western Forest Products’ investments.
Clark said the forest industry plays a vital role in the Island’s economy and Western Forest Products’ investment ensures jobs stay in Nanaimo.
The Nanaimo mill employs about 75 workers. More will be added after the upgrades are completed in mid 2016.