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Interfor Corp.’s Philomath sawmill will see an indefinite curtailment of operations and a gradual wind-down, expected to be completed by the end of March.
In an early February news release, the company cited persistent high log costs and ongoing weak lumber market conditions as reasons for the curtailment and eventual closure.
Losses quadrupled between the third and fourth quarters last year. The corporation acquired the Philomath mill from Georgia Pacific in 2021.
It is unclear from company statements how many employees may be affected.
Executive Vice-President of U.S. Operations Bruce Luxmoore said in a statement that the decision was “necessary in light of the evolving operating and market environment.”
Lumber prices weakened in the last quarter of 2023, causing prices to fall by $60 per 1,000 board-feet compared to the third quarter, according to the company’s Q4 2023 financial report.
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The corporation reported a net loss of $169 million in the last quarter of the 2023 fiscal year compared to $42.4 million in the third quarter.
A pile of haphazardly stacked wood viewed through a wire fence at Interfor’s Philomath sawmill.
In the report, the company said it anticipates that in the near term, the market will continue to be impacted by inflationary pressures, elevated interest rates, labor shortages and unstable geo-politics.
However, in the long term, the company said ageing housing infrastructure and policies to increase housing supply will favorably influence standard demand and supply patterns.
The company said it will remain flexible, adjusting its operations to reduce capital expenditures during downturns and ramping up production to match increased demand.
“We recognize the impact this decision will have on our employees, who have contributed so much to the business over the years,” Luxmoore said.
The Philomath sawmill produced a mix of kiln-dried and green Hemlock and Douglas-fir dimensional lumber and timbers and had an annual capacity of 220 million board-feet, according to the release.
In the U.S. Northwest, the corporation’s mills in Molalla, Oregon, Longview and Port Angeles, Washington will continue to operate.
Citing similar reasons, there will also be reduced lumber production at the corporation’s British Columbia location by 30 million board-feet in the first quarter of 2024.
In addition to weak market conditions and low log inventories, the company said an “unseasonably warm weather” in the region has hampered deliveries.
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Kosisochukwu Ugwuede (she/her) covers the cities of Corvallis, Philomath & Millersburg. She can be reached via e-mail at Kosiso.Ugwuede@lee.net or by phone via 541-812-6091
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