Federated Co-Operatives puts Canoe operation up for sale

Federated Co-operatives in Canoe is for sale.

Darrell Embley, vice-president of forest products at Federated, confirms the business is seeing prospective buyers coming through.

“This isn’t the first time. There are some serious people,” he said.

Asked when the operation was advertised for sale, he said it has happened intermittently.

“About eight years ago,” he said with a little laugh. “It has been out there from time to time, with a lot more activity lately.”

He said he informed the employees there would be people coming around to look at the operation, but none yet has made a formal offer.

“I don’t like to create anxiety among employees. If it’s the right offer, yes, Federated would be interested in that.”

Regarding people’s worries that the business might be sold and shut down in order for other companies to buy the equipment, he said he doesn’t think so.

“We’ve had a few look at us and they have different perspectives on what they see of interest. Certainly everyone looking at the plywood plant is intending on operating it. Some are looking favourably at the sawmill,” he added. “It’s only talk at this point. They’re just doing evaluations of the business.”

He said buyers are interested in the plywood plant, particularly because it’s made huge gains over the last year and a quarter. Currently, the Japanese earthquakes and tsunami are prompting a large demand for plywood.

“It’s good for business, unfortunately,” he said.

Prospective buyers have been given information on the Canoe operation’s timber supply and other details to review, Embley said.

“We’ll be arranging meetings to sit down and discuss potential offers. Whether or not the offers will be acceptable to Federated will be up to Federated.”

He said Federated is not being motivated to sell by the need for money, but whether they want forest products to be central to the rest of the business.

“They’re not giving it away; it’s not a fire sale.”

Overall, he said he doesn’t want to raise anyone’s anxiety level.

“There certainly seems to be an interest and we will possibly get some offers that will be worth considering.”

At last count in January, 222 people were directly employed at Federated, all full-time. Of those, 186 were with the plywood operation, 11 in the woodlands division, 17 in administration and eight with the sawmill, which was shut down in 2007, carrying out duties such as managing fibre inventory in the lake with tugboats. Then there are associated logging contractors and others, bringing  the total to about 320.