West Fraser Timber will close its sawmill in Maxville, Florida and indefinitely suspend operations at its sawmill in Huttig, Arkansas by the end of this month. The company took this decision in the context of high raw material costs and weak lumber markets.
Approximately 80 employees will be affected by the closure of the Maxville sawmill, while the indefinite suspension of operations in Huttig will impact 140 employees. In total, this step will reduce West Fraser’s US lumber production capacity by around 270 million bft (nominal: 640,000 m³; converted into 2-by-4 equivalent: around 430,000 m³). West Fraser expects to mitigate the impact on affected employees by providing work opportunities at other company operations.
As a result of high raw material costs in Maxville and the currently low prices for lumber, both sawmills are unable to operate in a profitable way, as the company states. The closure of Maxville and the indefinite suspension of sawmill operations in Huttig will help the company to better align its US lumber capacity with demand.
West Fraser anticipates taking restructuring and impairment charges of approximately US-$50 million in the fourth quarter of 2023 associated with this announcement.
