By Steve Zika, CEO Hampton Lumber
Since Hampton Lumber announced our intention to acquire the Fort St. James sawmill and the associated timber licence from Conifex, there has been an understandable amount of skepticism about our intentions to build a new sawmill.
I realize and understand that Fort St. James residents are anxious about the future. With many sawmills curtailing or closing due to high log costs and timber supply shortages we have entered a very difficult period for the forest products industry in British Columbia. Hampton Lumber suffered through a similar period in the Pacific Northwest during the 1980s when environmental litigation halted virtually all harvests on the federal forests.
We have operated sawmills in small communities for nearly 80 years.
We know how devastating a mill closure is to a community. The Declaration of Financial Crisis issued on July 16 by Mayor Bev Playfair and Chief Alexander McKinnon of Nak’azdli Whut’en reaffirms the very real economic and social costs of the Conifex mill closure.
As a family-owned saw milling company, we are fortunate to have the flexibility to operate with a long-term focus. Over the past several decades, this has helped us minimize the likelihood of painful shutdowns and disruptions for our employees, their families, our contractors, and our communities.
This was noted in recent coverage in BC Local News (‘Hampton mills stand out for avoiding curtailments’). Given the nature of our business, curtailments and shutdowns can be a reality for any company in our industry. However, the Hampton family and our management group work hard to minimize these disruptive actions.
The forest products industry is competitive and its future in British Columbia is going to be challenging. Success will require long-term strategic thinking and a willingness to take risks. While other companies may be reluctant to expand or enhance operations in British Columbia, we believe that a new sawmill in Fort St. James – sized for a secure future timber supply – will be competitive and sustainable.
Our two sawmills in Burns Lake, which are partially owned by the local First Nations, still face significant challenges in maintaining existing production levels in the face of dramatic reductions to the Lakes TSA AAC. (TSA - Timber Supply Area; AAC - Annual Allowable Cut).
To supply these mills, we have acquired additional licences to the west, partnered with First Nations, and aggressively competed to purchase wood over a large area.
We are not alone in this pursuit, which is why millions of cubic metres of timber is leaving the Fort St. James area and heading for other mill towns. Log profile is a major factor in determining where logs are processed. Small logs go to small log sawmills, big logs to big log mills, and pulp logs go to pulp mills. In addition, focused, streamlined mills have a distinct advantage and are often able to out-compete less modern local mills to secure logs.
While timber supply is a constant challenge for our Burns Lake mills, we would not be building a new sawmill in Fort St. James if we were planning to take the licence wood to Burns Lake.
With the existing Conifex mill being uneconomical, the only other significant consumer of local saw logs in the area is Sinclair Apollo. Our new mill will create an additional option for timber holders who are looking for a local home to sell their logs and will help ensure competitive log pricing.
We believe there is a future for wood manufacturing in Fort St. James. The approximate two-year period between the finalized purchase and completion of a new mill will be difficult for the employees and the community. The actual timing will be dependent on the government’s review and approval of the licence transfer.
We would like to establish some formal and informal partnerships in the community and have already met with First Nations leaders, local elected officials, and contractors. We plan to have more meetings in the coming weeks and months. Once the transfer is approved we will work toward finalizing the plans for the new mill. Our engineering team is already working on general sawmill design and we have developed financial budgets for the various designs. The most significant factor in the final mill design will be the estimated secure, long-term timber supply.
We have invited community leaders in the Fort St. James area to visit our Babine mill in Burns Lake this fall to learn more about new saw milling technologies, the rebuilding process, and employment opportunities during construction. We will discuss potential opportunities to support existing contractors and local businesses during the rebuilding phase through harvest off the licence and construction work. If we do operate the timber licence prior to the new mill being operational, the beneficiaries will be the local community as the Burns Lake sawmills do not currently require additional volume over the next 2 years.
While the transition won’t be easy, please know that we are sincere in our efforts to develop a successful sawmill in Fort St. James. Members of the Hampton team will be in the community this fall to continue our preparations. If you have any questions or comments, please contact us through our website at www.HamptonLumber.com or through Facebook.