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West Fraser reports 3% drop in Q3 2019 lumber production

October 22, 2019  By West Fraser

West Fraser Timber Co. Ltd. has reported its third quarter 2019 results:

In the third quarter, West Fraser completed the permanent closure of its Chasm, B.C., lumber facility and the elimination of the third production shift at its 100 Mile House, B.C.facility. The company also implemented a variable production schedule at its remaining B.C. mills given the difficult lumber market conditions and persistently high purchase log costs.

Operational results

Lumber production was down three per cent over the second quarter as the Chasm closure, 100 Mile House shift reduction and variable operating schedules in B.C. were partially offset by increased production at West Fraser’s U.S. South mills. Reduced schedules and downtime in Alberta from temporary weather-related log shortages were also a factor in reduced SPF production. Lumber shipments exceeded production by approximately 48 mmfbm in the quarter due primarily to the Chasm closure and 100 Mile House shift reduction. Adjusted EBITDA for the lumber segment was $39 million, consistent with the previous quarter. For the year lumber shipments have exceeded production by 179 million board feet as inventories are aligned to shift reductions and mill closures.

Although plywood production and shipments were slightly off the prior quarter, panels segment Adjusted EBITDA increased to $13 million from $10 million in the prior quarter.


NBSK production was 14 per cent higher than the prior quarter as West Fraser recovered from major maintenance shut downs at both its NBSK mills that occurred in the first half of the year. In spite of higher NBSK shipments, softer pulp pricing reduced Adjusted EBITDA for the pulp and paper segment to $3 million from $7 million for the quarter.

West Fraser generated cash flow from operations of $116 million in the quarter and net debt increased only modestly by $41 million all while maintaining significant available liquidity of $580 million. Capital investment in the quarter was $133 million, most of which was committed to the modernization of West Fraser’s U.S. South operating platform.


Ray Ferris, CEO of West Fraser stated, “Despite difficult forest product markets over the past several quarters, we remain committed to executing our strategy. We have taken significant action to right size our B.C. lumber operations over the past year. We have also completed a number of long lead time capital projects in the U.S. South over the last two quarters. We are beginning to see the benefits of these investment sand remain convinced of additional potential in our U.S. South operations. The combination of grade and recovery improvements, reduced operating costs, increased uptime and improvements to working conditions will have a long-term impact on our returns.”

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