Teal Jones to shut down coastal logging citing weak markets, high costs
Credit to Author: Derrick Penner| Date: Tue, 10 Sep 2019 17:09:24 +0000
British Columbia’s forest industry took another blow Tuesday as Surrey-headquartered Teal Jones Group announced the immediate halt all coastal logging operations, which will result in a “substantial loss of employment.”
The company cited “persistently weak lumber prices,” coupled with rising costs due to relatively high stumpage rates and new regulations that require harvesters to remove more residual waste fibre from their operations.
“These negative factors have made it impossible for the company to continue operating its forest licenses economically,” the company said in an unattributed media release.
Tuesday’s decision follows from last week’s announcement by competitor Interfor that it will close its Hammond sawmill in Maple Ridge by the end of the year, which will result in the loss of 147 direct jobs and spill over into its supply chain.
Teal Jones, in May, had already scaled back its logging operations on Vancouver Island curtailing its harvest of second-growth forests, but maintaining its cut of available old-growth blocks in its tree farm license.
Tuesday, however, the company said it it is halting all logging in its Fraser Valley and Vancouver Island operations.
“As a vertically integrated producer of lumber and other wood products, Teal Jones’ economics have been further negatively impacted by high stumpage rates and higher harvesting costs on the B.C. coast,” the company said.
In May, Teal Jones vice-president Gerrie Kotze told Postmedia that export-market premiums and speculative bidding were factors driving stumpage rates higher than were profitable for domestic lumber producers.
And the coastal forest industry’s troubles add to the crisis emerging in B.C.’s interior industry where shrinking timber supplies, compounded by poor markets, have seen closures and curtailments announced at more than 20 mills with the loss of hundreds of jobs.
More to come.