By: Chronicle Journal
White River’s lumber mill will likely get hit hard by U.S. duties on Canadian softwood, but the industry veteran in charge of the plant believes it will come through the crisis.
“It’s the same old battle (with the U.S.), but we will survive,” White River Forest Products CEO Frank Dottori declared in an interview Tuesday.
The mill, which was resurrected four years ago by a consortium now led by Dottori, stands to lose $6 million annually as a result of a new 20-per-cent duty imposed by the U.S. commerce department.
About half of the mill’s annual production of about 135 million board feet goes into the U.S. market.
“Is (the duty) going to hurt?” Dottori said. “You better believe it.”
To manage the hit, Dottori has begun to look at a wide range of potential efficiencies and shift changes at the mill, which currently provides 160 direct jobs.
In the short term, said Dottori, the mill should continue to benefit from a strong American demand for Canadian lumber as it looks to raise its prices.
“We have good workers and a good supply of (raw wood),” he said.
Currently, Canadian softwood lumber is in a high cycle, fetching on average about US$550 per one thousand board feet, based on a two-by-four made from spruce or pine. Sales to the U.S market have also been buoyed by a low Canadian dollar.
The White River operation will also continue with a plan to ramp up production to 175 million board feet, and in the longer term invest up to $7 million on equipment upgrades, said Dottori.
Shipping more wood to China, as some Canadian companies are looking at doing to cope with the new American duties, isn’t a viable option for Ontario producers because of high shipping costs, said Dottori.
“We’re not in a position to supply China,” he said.
In fact, he added, he’s worried that British Columbia mills may cope with the U.S. tariffs by dumping lumber into Ontario.
Dottori also operates Hornepayne Lumber, the resurrected Haavaldsrud Timber plant that went back into production in January, employing 50 people.