Less than six weeks after announcing its closure, a family-owned local timber company has purchased a Boyle sawmill from an Edmonton timber company for more than $30.6 million, plus working capital. However, the mill is still scheduled to be shut down this year.
The deal between Northland Forest Products, located 16 kilometres north of Fort McMurray, and Millar Western Forest Products Ltd. was finalized on Dec. 22, 2015. Since then, Northland has been moving the sawmill’s existing timber inventory to its Fort McMurray mill.
Once that inventory is depleted, Northland president Howard Ewashko says, the Boyle sawmill will close. The staff, who remain Millar Western employees, will be laid off.
The process is expected to be complete by the end of February, although the winter or equipment issues may prolong the process. Ewashko says there are no current plans to reopen the mill in the near future. In a statement, he said the Boyle operation would be a good fit to expand Northland’s business and improve their “fibre security.”
“It’s going to be mothballed and currently we are looking at different opportunities there,” he said on Tuesday. “It’s just hard to predict what’s going to happen in the next six months. Firstly, we want to make sure we optimize the timber supply in the woodlands area first and then the mill site end.”
In December, Ewashko said acquiring the Boyle sawmill will help guarantee the Fort McMurray business a long-term future. The enlarging presence of the oil industry in the last decade means there are less trees to harvest. But for export industries, such as lumber, the low Canadian dollar brings advantages when trading with the United States.
“Our current timber supply has been reduced due to oilsands expansion, so we needed to get that timber supply numbers up and this was one way to do that,” said Ewashko. “It’s still a fragile economy and we recognize the economy in Alberta isn’t that great, but with an upwards trending U.S., it looks like our markets might strengthen.”