By Derek Penner, Vancouver Sun
Vancouver-based lumber producer Interfor is buying four U.S. sawmills for $95 million, increasing the company’s hedge against looming constraints on the B.C. lumber sector.
The deal involves the purchase of two mills in the Pacific Northwest and two in the U.S. southeast from Tacoma-based Simpson Lumber. The transaction turns Interfor into North America’s fourth-biggest lumber producer, with more than two-thirds of production coming from American facilities.
Interfor and peers such as Canfor Corp. and West Fraser Timber have all made substantial investments in the U.S., particularly the south where timber supplies are rising at the same time companies are facing timber shortages in B.C.
“If you want to be in this business, you have got to have a significant market presence in the U.S.,” the world’s biggest market for lumber, said Interfor CEO Duncan Davies. And for Interfor, he added that it makes sense for that presence to be through owning mills located stateside.
The mills Interfor is purchasing are in Longview, Wash., Commencement Bay, Wash. (near Tacoma), Meldrim, Georgia and Georgetown, South Carolina.
Davies said owning U.S.-based production leaves companies less exposed to factors such as changes in currency exchange rates, a resumption in trade disputes once the current Canada-U.S. softwood lumber agreement expires next fall, and shortages of timber in B.C.