Citing weakness in projected orders and low log availability, officials at Columbia Forest Products this week announced the indefinite idling of the company’s Rutherglen, Ontario production facility and the associated layoff of approximately 70 employees, commencing in the mid to late April, 2010 time-frame. The Rutherglen mill converts birch logs into decorative face veneers which are used in making hardwood plywood.
Mill manager Dave Drenth said that employees were given eight week working notice of the shutdown and there is no set date for the mill to resume operation.
"We are going to keep the plant ready for production through the summer. We will keep evaluating business conditions and if it looks like we can be competitive again we'll look to start things up," Drenth said.
Drenth cited extremely difficult market conditions as being responsible for the shutdown.
"The exchange rate is terrible the U.S. recession is still in full swing and we can't get logs. We're hardwood so hardwood harvesting is 5 to 10% of what softwood guys get so if the softwood guys aren't busy and running full swing we don't get our logs. We are trying to run only birch at this mill and that makes it even tougher," Drenth said.
The company also noted that competition from imported Chinese birch wood products has kept demand for domestic birch veneer down at historic low levels.
Columbia added that challenges in acquiring the birch logs themselves remains a chronic problem for the Ontario based plant. Because of the economic slowdown, the logging industry as a whole has suffered crippling layoffs. Fewer loggers in the woods translate into weak availability of the raw materials, and in turn, the inability to cost-effectively operate a processing mill like the one in Rutherglen.
Columbia Forest Products also has a plywood division facility in Hearst Ontario and a small scale plywood plant in St. Casimir, Quebec. Drenth says that as both facilities have a different product and demand from the Rutherglen operation they will be continuing to operate at their current respective production levels.