BC Forest Watch
By Elaine Macdonald-Meisner
Prince George, B.C.- Conifex has made its decision, and the El Dorado sawmill in the Southern US will be upgraded first.
Conifex had been assessing both its idled Mackenzie Site One sawmill and its recently purchased El Dorado facility in Arkansas as to which facility would be at the top of the priority list for upgrades.
“We are doing the US first and Mackenzie second but it is not because of any local dissatisfaction” says Conifex CEO and President Ken Shields, it has more to do with plain dollars and cents.
Shields says while the two projects are “pretty similar” there is one striking difference, and that is the selling price of the product. “It costs roughly the same to produce a thousand board feet in B.C. as it does in the Southern U.S.” says Shields, “But the selling price is $400 dollars in the U.S. and $270 dollars in B.C.”
Timber supply is not an issue as the Mackenzie fibre supply is healthy, but Shields says the uncertainty over what will be in the renegotiated softwood lumber agreement is another factor that tipped the scales in favour of upgrading the El Dorado facility first.
Shields says upgrading the Mackenzie Site 1 mill will still happen, it just won’t be the first on the capital plan list. “So with the huge spurt in prices in the US and our Canadian Prices haven’t kept pace because China has been weak”. He says the decison to go with El Dorado first, is “more based on factors that are outside the control of British Columbians, in the sense the prices are better in the US and there’s no uncertainty due to the Softwood lumber agreement.”