Conifex to sell sawmill in Fort St. James, B.C., buyer plans to rebuild

Another sawmill company has announced that one of its B.C. operations is shutting down, adding another site to the swollen list of mill closures or slowdowns hitting the province.

Conifex said it has agreed to sell its sawmill in Fort St. James to Hampton Lumber for around $39 million. The transaction hasn't closed, but on Tuesday, Conifex said it doesn't expect to resume normal operations before it does "due to continued uncertain market conditions."

In a statement, the head of the sawmill company said there is "too little sawlog supply" to maintain operations as it has in the B.C. Interior.

"The decision we have taken to sell the mill was extremely difficult; however, we are encouraged by Hampton's plans for the site," wrote Conifex CEO Ken Shields.

Hampton Lumber runs nine sawmills across the Pacific Northwest, including two in the Burns Lake area of B.C. Its CEO, Steve Zika, said it plans to build a new sawmill in Fort St. James despite "extremely challenging" conditions ravaging the industry.

But Zika holds out hope.

"We believe the long-term outlook for Canadian lumber is promising," he said in a news release announcing the deal.

B.C.'s forestry sector has been in perpetual decline for decades. More than 400 mill workers across the province have lost their jobs in the past two months alone as various companies announced closures or curtailments.

In May, Tolko announced it would be closing its mill and laying off 150 people in Quesnel. Another 90 will be laid off at the corporation's site in Kelowna as the company shaves its workforce.

On June 10, Canfor announced it was "significantly" curtailing operations at all but one of its B.C.'s sawmills for two to six weeks. That news came days after the corporation announced it was permanently closing its sawmill in Vavenby in July, affecting more than 170 jobs.

Those numbers do not account for contractors and workers in related industries who are also affected by cuts.

Conifex had previously announced it was curtailing operations at its Fort St. James site as well as its Mackenzie, B.C., site for several weeks as of May 6, "due primarily to continued high log costs and lumber market conditions."

Gary Fiege, president of the Public and Private Workers of Canada union, said Tuesday's announcement is further proof the sector is struggling.

"It's just another indicator of the sad state of our industry," he said.