All indications are that the future may be bright for Western Forest Products, which operates two sawmills in Nanaimo, and the province's forest industry after years of struggle.
WFP, one of the largest forest companies in the province, reported in May that it had completed one of the best financial quarter in the company's history, largely due to improved log and lumber markets after years of a downturn in the industry.
WFP announced at the time that its had made almost $32 million in earnings before interest, taxes and depreciation in the first quarter of 2013, an increase of $22.5 million over the first quarter of 2012.
Adding to the optimism for the company and the sector, the Conference Board of Canada predicted last week the nation's wood products industry will likely see its profits double in 2013, largely due to the ongoing recovery in the U.S. housing market and the strong Chinese demand for wood products.
The downturn in B.C.'s forest industry, which began in 2007 with the crash of the American housing market, has seen hundreds of forestry workers in Nanaimo and the mid-Island region lose their jobs and many of the area's sawmills are still working with skeleton crews until the sector improves, including the WFP mills in downtown Nanaimo and at Duke Point.
WFP spokeswoman Mackenzie Leine said the company is moving forward with its plans to invest $200 million into its sawmills on Vancouver Island over a three-year period, and the $38 million in upgrades and renovations at the company's Saltair operation in Ladysmith are almost complete, with a further $7 million in upgrades at its sawmill in Port Alberni still ongoing.
But Leine said improvements and upgrades at the Nanaimo mills to make them more internationally competitive are "still being evaluated" at this time, with no plans for work to begin anytime soon. Leine said that despite the recent optimism, WFP knows that fluctuations in the industry are common and the company must always be prepared for the cyclical nature of forestry markets.
She said the company also has concerns about "continuing pressures on its land base" in B.C. and its ability in the future to provide its mills with the required wood fibre supply to keep them profitable and in operation.
"The global marketplace is a very competitive environment and, in order to attract investment, we require a secure business environment," Leine said. "The company has gone through some trying times in recent years so we have to be cautious. But we do believe that WFP has a very bright future and the province's forests are not going anywhere."
After a period of instability and increasing layoffs, Nanaimo's two Western Forest Products sawmills closed their doors indefinitely in 2008, putting more than 300 out of work until markets improved.
After a shutdown of almost two years, WFP reopened its sawmill in downtown Nanaimo with one production line in the fall of 2010, and hired back about 30 workers. The planing operation at Duke Point was not shut down in 2008 and continues to employ approximately 30 workers.
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