Norbord to resume production at Chambord mill
Norbord Inc. announced yesterday that in response to increased customer demand the company intends to restart production at its oriented strand board (OSB) mill in Chambord, Que., in spring 2021.
Based on strong North American OSB demand forecasts and indications from customers for the foreseeable future, Norbord anticipates it will be unable to meet demand from its currently operating mills. Following the adoption of its flexible operating strategy earlier in the year and offsetting the recent loss of capacity from the permanent closure of its 100 Mile House, British Columbia mill, Norbord intends to complete the preparatory work that will allow production to restart at the Chambord mill. The remaining work includes completing equipment installation and commissioning the mill as well as employee recruitment.
“Norbord acquired the Chambord mill in 2016 with the intention to one day return it to production, and we are pleased that conditions now allow us to do just that,” said Peter Wijnbergen, Norbord’s president and CEO. “The mill is well-aligned with our business strategy and is well situated for sales into the northeast region. We have made significant investments and upgrades to position it as an important part of our portfolio, and the Chambord mill will be a meaningful contributor to our ability to meet our customers’ needs. The Saguenay-Lac-St-Jean region has a rich wood products history, and we look forward to becoming a more significant part of this community.”
The restart of the Chambord mill will enable Norbord to optimize production at its two Quebec mills and to more effectively serve customers in eastern Canada and the northeastern U.S. The company is targeting to commence production at Chambord in the spring of 2021, followed by a typical start-up curve. Chambord production will be able to substitute for products at the company’s other mills, further bolstering Norbord’s flexible operating strategy. This flexible operating strategy, which has been employed since the early days of the COVID-19 pandemic, now gives Norbord the ability to cost-effectively adjust production across its mill portfolio to more than offset the production from the Chambord mill if demand proves to be lower than expected. Therefore, should demand decline, production schedules across Norbord’s platform will be able to be adjusted quickly and cost-efficiently. After significant re-investment and with a strong available labour force and committed wood supply in the region, the Chambord mill is expected to be among the Company’s lowest cost operations once fully ramped up.
Since Norbord acquired the mill in 2016, it has invested approximately $54 million (CAD $71 million) as of the end of the third quarter of 2020 to prepare the mill for eventual restart. In total, Norbord expects to invest approximately $71 million (CAD $94 million).
Norbord has a wood allocation agreement in place with the Quebec Ministry of Forests, Wildlife and Parks covering the vast majority of the mill’s anticipated fibre requirements. Chambord is located in the biggest timber-producing region in Quebec, and the Company expects to fill its remaining fibre needs from private sources.
When fully operational, Norbord expects Chambord to employ approximately 120 people. The Chambord mill has a total stated annual production capacity of 550 million square feet (3/8-inch basis) and has been curtailed since 2008.