Skeena Sawmills is closing down for an unknown length of time as of Feb. 8, citing high operating costs, lack of a secure fibre supply and weak markets combining to make its operation uneconomical.
The announcement follows a halt to log deliveries just over a month ago so that the mill could run down the inventory of what it had in its yard.
The closure includes the next-door pellet plant subsidiary, Skeena Bioenergy, which uses residue from the mill.
More than 150 people are affected, a number that grows when factoring in the mill’s logging contractors and other suppliers.
“Over the past month the challenges facing the industry have not improved, said company chief operating officer Greg DeMille.
“With no improvement in the current operating conditions, we have been forced to implement a temporary shutdown,” he said.
The mill has been trimming production since late last fall, again saying high operating costs were affecting its economic importance.
A company statement indicated it remains confident it will re-open when conditions improve.
“We are using this downtime to undergo a comprehensive evaluation of our economic fibre supply and develop innovative solutions to provide sustained success for our business and community,” said Sandra Wu, Skeena’s president and chief executive officer.
Skeena Sawmills joins a list of sawmills either shutting down for good or for extended periods of time with all saying high operating costs and fibre supply are key reasons.
Canfor is closing its Chetwynd sawmill and pellet plant for good. It is also closing its Houston sawmill as of April but says it may make a decision to rebuild in June.
Canfor is also closing a pulp line in Prince George.
Skeena Sawmills has been a long term employer in the area but was closed by then-owner West Fraser in the late 2000s only to be purchased by a company backed by Chinese investors in 2011. It was re-opened in 2013.
The new owners put approximately $50 million into improvements but were also seeking government money to further modernize the operation.
The improvement list included new dry kilns, an upgraded planer, an upgraded head saw, and a conveyor belt to move sawdust from the mill to the adjacent pellet plant.
The opening of the Skeena Bioenergy pellet plant at a cost of $20 million was intended to provide another revenue stream by finding a use for the waste produced by the sawmill.