Canfor Corp. (TSX:CFP) plans to reduce operations at its sawmills in Western Canada, and extend a curtailment at its pulp mill in Taylor, citing “extreme” supply chain challenges related to rail transportation.
Canfor announced today that it plans to implement reduced operations at all of its sawmills in Western Canada, starting April 4, which will reduce its Western Canada production by 100 million board feet.
Earlier, its pulp and paper subsidiary, Canfor Pulp Products (TSX:CFX), announced it would extend a curtailment at its pulp mill in Taylor by at least six weeks – also due to rail issues and a backlog of inventory.
Canada’s freight rail system has been hammered by a series of interruptions, starting with a global pandemic that caused global supply chain bottlenecks and interuptions, followed by wild fires last summer, then floods, which took out rail lines in B.C. and, more recently, labour strife at Canadian Pacific Railway (TSX:CP).
“Unfortunately, the ongoing rail transportation situation has not improved, and we have no choice but to extend the current production curtailment,” said Kevin Anderson, vice president of operations at Canfor Pulp. “We are very disappointed in the ongoing impact this is having on our employees, their families and the community.”
Likewise, Canfor Corp. CEO Don Kayne cited supply chain issues in the decision to reduce sawmill operations.
“We are experiencing extreme supply chain challenges that are significantly impacting our operations and it has become imperative to reduce operating schedules to address our unsustainable inventory levels,” he said in a press release.
