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Canadian firms may build new sawmills in US South

Dec. 8, 2017 - Two Canadian-based companies, both in recent years having purchased and now operating multiple sawmills in the U.S. South, are considering building greenfield sawmills in the South.

Interfor reports it has completed a detailed feasibility study and business case for a greenfield sawmill capable of producing in excess of 200MMBF annually and has identified a potential location in the Central Region of the U.S. South. Interfor estimates the total capital cost to be approximately US$115 million, including pre-startup costs and working capital. A decision on the project is expected in early 2018.

Canfor reports it is conducting a detailed viability study of a greenfield opportunity at one of several locations in the U.S. South. The mill capacity currently being considered is 250MMBF annually. The study is expected to be completed in the first quarter of 2018, with a final decision to follow.

In addition, Interfor has been working on a multi-year strategic capital plan that will involve a number of projects, both large scale projects that involve the rebuilding of a number of machine centers, plus a series of smaller debottlenecking and optimization projects with attractive paybacks.

For 2018, discretionary spending is expected to be in the range of $100 million, and the company is proceeding with projects at two of its sawmills in the U.S. South that involve spending more than US$60 million, which are designed to increase production by 150MMBF annually.

Those projects appear to be a $16.5 million investment at its Meldrim, Ga. sawmill, focusing on eliminating a bottleneck at the back end of the operation and includes the installation of a new continuous lumber dry kiln and upgrades to the planer mill. Lumber production is expected to increase by 50%, in addition to improving product quality and mill efficiency.

Interfor also plans to invest $46 million to upgrade and modernize its sawmill in Monticello, Ark. The project includes the installation of new state-of-the-art machine centers in the sawmill as well as upgrades to the planer mill and a new continuous lumber dry kiln. Annual lumber production is expected to double.

Canfor said its board has also approved a US$125 million capital investment program focused on its U.S. South sawmill operations to increase production capacity by 350MMBF by the end of 2019. The investments will target a number of sawmill and planer modernization opportunities along with increased drying capacity.

Story written by the Southern Loggin' Times.

December 8, 2017  By Southern Loggin’ Times Editors

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