Western Forest Products (TSX:WEF) has resorted to layoffs at its Port Alberni sawmill, says the Truck Loggers Association (TLA), but not because of falling revenue.
In fact, the company last week reported a doubling of fourth quarter earnings over Q4 2014, and year-over-year, the company’s annual revenue for 2015 grew by $1 billion – a 4% increase – compared with 2014.
But according to the Alberni Valley News, the company recently resorted to layoffs at its Alberni Pacific Sawmill. The union representing mill workers, the United Steelworkers Local 185, told the newspaper 100 workers were laid off, while the company insisted only 40 were laid off. Neither Western Forest Products nor the union could be reached for comment.
The TLA says the mill has a log shortage – but again, not necessarily due to a shortage of timber.
Rather, the contractor that supplies the mill is in a dispute with the company over how much it is paid to cut and haul logs, according to the TLA.
TLA executive director Dale Elstone issued an “I told you so” news release, saying the association has been warning the industry for some time that it can’t continue to underpay its logging contractors, a number of whom have recently went out of business.
“This week our warnings came true,” Elstone said in the release. “The TLA has been saying for some time that the large forest companies who control much of coastal B.C.’s public timber harvest are threatening the timber supply chain and putting rural communities at risk.”
Last month, Business in Vancouver detailed how logging contractors are facing increasing cost pressures, as merchantable timber becomes harder to access.
It is forcing some contractors into steeper terrain, which will require investments in steep slope logging equipment, some are simply going out of business.
Elstone warns there could be more layoffs or mill closures, if logging contractors cannot make a sufficient return to make the investments they will need to make.
“This dispute, the layoffs at the Port Alberni mill, the loss of work by the logging contractor involved in the dispute and the risk of further mill closures in the area are evidence of the issues our members are facing,” Elstone said. “This is just the tip of the iceberg as far as rural community stability is concerned.”