Western Forest Products Inc. (TSX: WEF) (“Western” or the “Company”) today announced capital investments totaling approximately $29 million towards its B.C. operations. The investments are part of the Company’s ongoing commitment to support value-added manufacturing on the B.C. Coast and grow its value-added wood products business, all while continuing to improve Western’s long-term competitiveness. These capital investments represent an increase of $13 million over and above the $16 million of capital investments discussed in the Company’s first quarter 2022 Management’s Discussion and Analysis.
Specifically, the investments include:
• $12.3 million in a new continuous kiln at the Saltair sawmill in Ladysmith, B.C., allowing for increased capacity for continuous drying of lumber, while reducing energy consumption. The sawmill is the largest single-line sawmill on the coast of B.C. following the previous multi-phase strategic capital investment of over $42 million undertaken to modernize the sawmill since 2013. The facility has three existing kilns on site for drying lumber.
• $7.9 million at the Duke Point facility in Nanaimo, B.C., to optimize the centralized planer facility with new equipment, including a machine stress rated (“MSR”) lumber grading machine. The MSR machine provides strict lumber grade quality control with known values for strength and stiffness for lumber utilized in engineered products, including roof trusses, glulam and mass timber. The sawmill and planer have undergone a previous multi-phase strategic capital investment of over $45 million since 2015 to modernize the facility.
• $8.3 million in other capital investments in the Company’s B.C. operations, including new kiln control systems at the Saltair sawmill and our Value-Added Division in Chemainus, B.C. to increase supply of kiln dried finished products for customers.
Each of these investments will serve to generate additional value from Western’s wood products. Work on these investment projects is underway and is expected to be completed by 2023.
Western is one of the largest private employers on Vancouver Island with six sawmills and two remanufacturing plants, providing 3,500 jobs that support nearly 20 healthy and vibrant communities across the province. These operational upgrades are an extension of the Company’s significant investment in value-added manufacturing on the B.C. Coast. Since 2013, Western has invested over $450 million throughout its entire operating platform.
“Congratulations to Western Forest Products on these substantive value-added investments on Vancouver Island. These projects will strengthen our province’s position as a world leader in mass timber and developing value-added wood products. When we work together towards achieving clean growth, we are supporting our StrongerBC Economic Plan, helping to fill the jobs of tomorrow while building an economy that works for everyone.”
Ravi Kahlon, Minister of Jobs, Economic Recovery and Innovation
“Investing to upgrade Western’s operations is great news for forestry workers, communities and the industry as a whole. These capital investments support our government’s vision to increase innovative, made-in-BC manufacturing and get more value out of every tree harvested.”
Katrine Conroy, Minister of Forests
“We welcome Western’s ongoing investments to manufacture wood products from sustainably managed forests. This type of investment helps sustain jobs and build a more prosperous future for the many in and around our community who depend on forestry.”
Leonard Krog, Mayor of Nanaimo
“We are pleased with this investment in the future of the mill and our community. Western’s manufacturing facility is a strong economic driver, supporting numerous workers and their families while also generating business and benefits for vendors and contractors.”
Aaron Stone, Mayor of the Town of Ladysmith
“Western has deep roots in the community and plays an active role by providing significant employment and contributions. This investment further affirms the company’s commitment to Nanaimo, and we look forward to our ongoing partnership for many more years to come.”
Kim Smythe, Greater Nanaimo Chamber of Commerce President and CEO
“We are proud to add to our ongoing investments in our manufacturing facilities on Vancouver Island with substantial upgrades that maximize the value of the wood products we process locally. With the use of wood in multistorey construction growing as a low carbon solution, we have invested in considerable research to determine how we can participate in this growth opportunity. Adding equipment that allows us to manufacture product lines used in glulam and mass timber building represents an exciting step forward for our company and employees, as we pursue growth while supporting the needs of our communities and planet. We are also looking forward to increasing our drying capacity by approximately 72 million board feet, which is an important part of the process in making higher value wood products.”
Joel Fournier, Vice President of Canadian Manufacturing, Western Forest Products
About Western Forest Products Inc.
Western is an integrated forest products company building a margin-focused log and lumber business to compete successfully in global softwood markets. With operations and employees located primarily on the coast of British Columbia and Washington State, Western is a premier supplier of high-value, specialty forest products to worldwide markets. Western has a lumber capacity in excess of 1.0 billion board feet from seven sawmills and four remanufacturing facilities. The Company sources timber from its private lands, long-term licenses, First Nations arrangements, and market purchases. Western supplements its production through a wholesale program providing customers with a comprehensive range of specialty products.
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This press release contains statements that may constitute forward-looking statements under the applicable securities laws. Readers are cautioned against placing undue reliance on forward-looking statements. All statements herein, other than statements of historical fact, may be forward-looking statements and can be identified by the use of words such as “will”, “expected”, “continue” and similar references to future periods. Forward-looking statements in this news release include, but are not limited to statements relating to: domestic and international market and general economic conditions, demand for the Company’s products, the timing to complete the investment projects, the anticipated benefits of the investment projects, future employment, operating performance, objectives and strategies. Although such statements reflect management’s current reasonable beliefs, expectations and assumptions, there can be no assurance that forward-looking statements are accurate, and actual results or performance may materially vary. Many factors could cause our actual results or performance to be materially different, including a change in the Company’s financial situation, economic and financial conditions, international and domestic demand for forest products, changes in opportunities, and other factors referenced under the “Risks and Uncertainties” section of our MD&A in our 2021 Annual Report dated February 16, 2022.