Vancouver Sun — Persistently low lumber prices and high log costs make operations uneconomic, said a Tolko vice-president, Troy Connolly.
The mill had already reduced operations to a single shift in May at the cost of 90 jobs and the remaining 127 employees were reaching the end of a six-week curtailment and received additional layoff notices, according to report in the Vancouver Sun.
“This decision was not easy for us to make,” said Connolly, Tolko’s vice-president of solid wood. “We are very disappointed to be in a position where we have to curtail the mill, particularly given the reasons for this extension are beyond our control. However, with lumber market prices at sustained low levels and high log costs in B.C., the mill cannot be cost-competitive.”
On Monday, West Fraser Timber Co. Ltd. announced it would reduce operations using “variable operating schedules” at five of its Interior sawmills to cut its overall lumber production between 15 and 25 percent and curtail its plywood production for two weeks.
The mill, which was acquired by Tolko in 2004 as part of the purchase of Riverside Forest Products, has operated in Kelowna since 1932.
Over the summer, Tolko also permanently closed its Quest sawmill in Quesnel with the loss of 150 jobs and with Thursday’s decision, the Kelowna mill becomes the ninth B.C. sawmill to be indefinitely or permanently shuttered.
And Tolko’s closure in the interior comes just days after the Teal Jones Group announced an immediate halt to logging on B.C.’s coast, with operations in the Fraser Valley and on Vancouver Island, which will mean layoffs for about 300 loggers and uncertainty for some 500 mill employees.
Gerrie Kotze, Teal Jones Group vice-president, told Postmedia that stumpage rates, the fees that timber firms pay the province for cutting rights to harvest logs, are market based and will eventually decline to catch up with depressed lumber prices, but based on current estimates that might not be until the summer of 2020.
Last week, Interfor announced it was closing its Hammond sawmill in Maple Ridge, a site with a history that stretches back 101 years, by the end of the year, eliminating 147 jobs.