Failure of the Canadian and U.S. governments to reach a new softwood lumber agreement has left the industry in limbo but EACOM is attempting to mitigate potential fallout of duties by diversifying its product base.
The wood products company recently announced that it has completed the acquisition of AnthonyEACOM, now to be called EACOM Sault Ste. Marie.
The engineered wood mill in Sault Ste. Marie employs just more than 50 workers who will be added to EACOM’s 1,100 employee base.
EACOM Timber Corporation is a major Eastern Canada woods products company formed in 2008.
Operations include the manufacturing, marketing and distribution of lumber and wood-based value-added products, and the management of forest resources.
EACOM currently owns five Ontario sawmills and two Quebec sawmills as well as a remanufacturing facility in Quebec.
The recent purchase of the Sault Ste. Marie plant emerges from the previous joint venture between Anthony Forest Products and EACOM Timber Corporations. The Anthony Forest Products shares were recently acquired by a western Canada company and now EACOM has acquired the entire company.
The Sault Ste. Marie facility produces I-joists and engineered wood products. The acquisition now makes EACOM the province’s largest softwood lumber producer, said Christine Leduc, EACOM’s director of public affairs.
“We make softwood lumber and we sell our products about 50-50 to Canada and the United States and certainly we are concerned with the uncertainty around the trade dispute in the U.S.,” she said.
The acquisition helps EACOM diversity its asset base and products but there are no plans to change the operation, Leduc said.
“We’re really happy to add our expertise to the Sault Ste. Marie team and we see potential for growth but at this point we don’t know what that will look like,” she said.
Canada’s softwood lumber industry remains in a state of uncertainty.
The previous softwood lumber agreement between Canada and the U.S. expired in the fall of 2015. That expiry provided both countries a year of free trade and an opportunity for the trading partners to renegotiate an agreement but that agreement never materialized.
As a result, the U.S. industry petitioned the American department of commerce which initiated an investigation into the softwood lumber industry, the results of which are expected in the coming weeks.
“We live in an era of protectionism. We have no ideas what the duties will be. We could be faced with unreasonably high duties so for us as a softwood lumber producer, with 50 per cent of our product going to the U.S.,” Leduc said.
A preliminary ruling by the US International Trade Commission earlier this year ruled that the Canadian softwood lumber imports have received unfair government aid and sold below their fair value, negatively affecting the US industry.
The Canadian industry is awaiting word of taxes to be imposed on shipments headed to the United States later this month. Those taxes are expected to be implemented in May.
Many in the Canadian industry fear that high duties could lead to job losses and mill closures.
However, I-joist products manufactured in Canada have not been subject to tariffs and EACOM is hopeful that by diversifying it product base, it will aid in the company’s resilience and growth in light of the uncertainty in the industry, Leduc said.
“At EACOM we believe it’s important to work with the Canadian government and the province,” she said. “We’re diversifying our products and making ourselves more resilient in the market.”
More recently, it was reported that U.S. President Donald Trump was advised to include the softwood lumber issue in any renegotiations of NAFTA.
A decision on the taxes to be imposed on shipments to the United States is expected to be announced April 24.