Canada's West Fraser to curtail Lake Butler operations amid weak market environment
West Fraser (WFG.TO) will indefinitely curtail its Lake Butler, Florida sawmill by the end of September due to high fiber costs and weak lumber markets, affecting nearly 130 employees. The decision reduces U.S. lumber capacity by about 110 million board feet, and the company plans to take an impairment charge in Q3 2024. The company also missed profit estimates in Q2, with analysts noting stagnant housing markets impacting lumber demand.
Sept 19 (Reuters) - Canadian producer of forestry products West Fraser (WFG.TO) announced on Thursday that it would indefinitely curtail its sawmill in Lake Butler, Florida, by the end of this month.
The curtailment would impact nearly 130 employees, and the company expects to mitigate this by providing work opportunities at other company operations.
High fiber costs and soft lumber markets led to the decision, the company said, where the current low-price environment has impaired the ability to operate the mill profitably.
This also reduces West Fraser’s U.S. lumber capacity by approximately 110 million board feet, and the company said it would take an impairment charge in the third quarter of 2024.
The Vancouver, Canada-based company missed profit estimates in the second quarter of the year.
Morningstar analyst Spencer Liberman in July had said that the stagnant housing markets as well as tepid repair and remodel demand were weighing on lumber demand end markets.