LP declines to submit Chambord Project for Minister’s review
September 17, 2015 - Louisiana-Pacific Corporation announced that it will not submit a project to the Quebec Minister of Forests, Wildlife and Parks’ Project Office to reacquire the wood license associated with its Chambord, Que., oriented strand board (OSB) mill.
After an in-depth analysis of the mill’s historical and projected costs, LP determined that market demand does not warrant operating the Chambord mill at this time, and it is not appropriate to reacquire the wood license without a plan for operating the mill.
“Based on these analyses, we do not believe that in the current OSB market, the mill can be operated competitively,” LP executive vice-president, OSB, Brad Southern said. “The mill will remain curtailed indefinitely for the foreseeable future.”
LP indefinitely curtailed production at the mill in 2008 due to worsening North American housing market conditions.
OSB is a commodity structural panel product that is highly dependent on cyclical and sometimes volatile North American housing starts and subject to competitive forces of regional supply and demand.
LP’s decision to not submit a project is based on the ongoing soft market for residential building materials in North America, high production and raw materials costs in Chambord and a competitive landscape that has become more challenging over the last seven years.
“The restart of this mill will require a substantial capital investment, and there’s no guarantee that we would get a return on that investment now, or in the foreseeable future,” said Mike Blosser, LP’s vice-president for EHS, forest resources, supply and logistics.
It is important to note that LP continues to operate and invest in its Maniwaki, Que., OSB mill, Blosser said.
“We look forward to working with the Ministry to ensure the economic viability of LP Maniwaki through volatile cycles of the North American housing market,” Blosser added.
Louisiana-Pacific Corporation is a leading manufacturer of quality engineered wood building materials including OSB, structural framing products, and exterior siding for use in residential, industrial and light commercial construction. From manufacturing facilities in the U.S., Canada, Chile and Brazil, LP products are sold to builders and homeowners through building materials distributors and dealers and retail home centers. Founded in 1973, LP is headquartered in Nashville, Tennessee and traded on the New York Stock Exchange under LPX. For more information, visit www.lpcorp.com.