The Canoe Forest Products plywood plant. (File photo)

Canoe Forest Products takes extra break over Christmas to cut costs

Prediction for future of plywood plant looks positive, says general manager

Although a rash of mill closures and layoffs are having devastating effects throughout the province, the Canoe Forest Products plywood plant is managing to keep its head above water.

That struggle will include an extra break over Christmas, however, a cost-cutting measure that’s been used before.

General manager Marcello Angelozzi explains the mill will be closed for two weeks during Christmas, from Dec. 23 to Jan. 3. Maintenance work will continue as well as a couple of days of shipping.

Canoe employs about 230 people.

“At Canoe here, it hasn’t been a pleasant eight months, it’s been more of a head-above-water situation. You have to realize the plywood industry itself, we haven’t seen permanent curtailments,” Angelozzi says, explaining plywood doesn’t face the same issues sawmills do.

“We’ve seen a couple weeks here or there taken down with West Fraser and Tolko, which would be the big players in the game, but overall there hasn’t really been any volume taken out permanently when it comes to plywood, which is what impacts Canoe.”

Read more: 2012 – Federated Co-op selling to Gorman Bros. Lumber

Read more: 2013 – Burns Lake buys Canoe sawmill equipment

Read more: Tolko mill in Kelowna to permanently close in 2020

However, he said the plant is down about 20 or 30 employees since the spring, when weekend production was reduced and then stopped completely, due to lack of demand.

“Even through the fall, which is typically our best time of the year – summer and fall, we didn’t have that run-up this year with everything going on and we’re impacted like everybody else in that capacity as far as slow takeaway.”

He explains shutdowns are due to log supply available to industry. Annual allowable cuts were increased to consume the pine beetle timber over the years, but that supply ran out.

“In the longer term, this rationalization (mill closures, curtailments), as some refer to it, was necessary, to be honest with you,” Angelozzi says. “It wasn’t that it wasn’t expected, we just had all those headwinds at the same time.” He refers to coinciding factors such as high log prices and low lumber and plywood prices.

He said in the long term, it’s possible other plants will need to close to balance the log supply in the province, but it’s hope the current closures have been the bulk of it.

As for the Canoe plant, he doesn’t expect to see any change this winter as it usually sees a slower demand, but he’s hoping for a more normal spring and summer, when demand typically increases.

The Gorman group as a whole, which owns the Canoe operation, has specialty products and not just plywood, which has helped it weather the storm, he adds.

“As our CEO likes to say, we’ve been bleeding while everyone else is hemorrhaging. So it’s not a very nice analogy – and it’s also naive to think that we haven’t been impacted in the group… We have been impacted and Canoe has been impacted dramatically.”

Asked if the plant will benefit from the closures, he says not a lot impacts the plant directly but, yes, indirectly.

“Overall with all of these operations we’re all competing for the same basket of logs. There is an indirect benefit to Canoe when other mills unfortunately have to curtail.”

Angelozzi’s prediction for the long term remains positive.

“We plan on Canoe continuing to run the next 20 years. For the short term, it’s head above water and see what happens in the spring here.”



marthawickett@saobserver.net

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