Taylor Plant Shutdown Extended – Alaska Highway News

About 80 workers affected, Canfor says, with a small team of 20 to handle shipments

A supply chain backlog and car shortage will continue to plague the Taylor plant through the summer and likely well into the fall.

Canfor says the pulp mill reduction “will continue for an extended period”, after cutting production in February due to transportation shortages and when finished inventory reached capacity.

Workers and local officials were notified on Friday, and Canfor says about 80 employees are affected. A small team of 20 is maintained “to facilitate shipments as we receive railcars,” the company says.

“The global supply chain crisis continues to significantly impact rail traffic to our Taylor plant, and we have only been able to ship a limited amount of product,” the company said in a statement. at Alaska Highway News. “Unfortunately, we expect the supply chain backlog to persist through the summer and likely well into the fall.”

The factory was closed for a “minimum” of six weeks in February, with another six-week extension announced at the end of March. The plant was also closed in December due to shipping disruptions caused by severe flooding in the Lower Mainland last November.

“Taylor Pulp has faced ongoing transportation challenges that have had a significant impact on the facility’s ability to ship product,” Canfor CEO Don Kayne said in a Feb. 16 statement.

Just over a month later, on March 29, Canfor Pulp’s vice president of operations, Kevin Anderson, said, “Unfortunately the current rail transportation situation has not improved and we have no no choice but to prolong the current reduction in production.

MPP Dan Davies called the news a “boost for the region”.

With factory workers losing their jobs, the fallout will be felt throughout the forestry sector, he said, “which is already on the cusp with recent government policies.”

Davies says many businesses in North Peace are facing a shortage of railcars. He says CN has agreed to meet with him and stakeholders “to see if there’s anything salvageable here with this issue.”

“You just have to pass the OSB factory [in Fort St. John] to see what problems they are having. We continue to hear from farmers about the challenges they face and generally the commitment to our communities, including Fort Nelson, to ensure the rail line is maintained,” Davies said.

“Hopefully there will be a resolution sooner rather than later, but a lot of things need to fall into place quickly,” Davies said.

The Taylor mill produces bleached chemical-thermomechanical pulp, with an annual production capacity of 230,000 tonnes. The cuts have already reduced production by at least 50,000 tons.

Canfor has previously said it faces increased costs due to limited fiber supply in the region, as well as weak long-term prospects for BCTMP markets.

In its quarterly report released on May 3, the company said it shipped 176,000 tonnes of pulp in the first quarter of this year, down 34% from 265,000 tonnes in the first quarter of 2021.

“Global pulp markets tightened significantly during the first quarter of 2022, primarily due to ongoing global transportation challenges and combined with unplanned pulp supply disruptions, largely due to outages. work in Europe and logistical constraints in British Columbia,” the company said in its report.

Although pulp prices have risen significantly since late last year, Canfor’s report notes that “global softwood pulp producers’ inventories at the end of February 2022 were at 45 days’ supply, in two-day upside from December 2021, well above the balanced range and largely reflecting the aforementioned supply chain constraints,” the company said.

“Market conditions are generally considered balanced when inventory is within the 28-36 day supply range.”

And despite the improved pricing, the company says its pulp sales in the first quarter of this year “were broadly in line with the prior quarter, primarily due to a significant delay in shipments (vs. orders) due to both global container shortages and transportation challenges in British Columbia.

“It’s unfortunate that global supply chain challenges have finally come to Taylor, but I don’t think you can necessarily point to railcar supply,” said Taylor Mayor Rob Fraser. “We’ve had issues with service in the past, but we’re doing what we can to work with CN to alleviate that.

That said, Fraser added, “I’m not too worried about the future of this plant.”

“We will work closely with Canfor and any employees who need help to see what we can do to help them,” Fraser said.

“It is my understanding that until the supply issues arose this plant was running well, there was profit and the most recent work (upgrades) done at the plant has made it more efficient. I have no reason to believe anything has changed based on conversations I’ve had with factory management.”

— with files by Dave Lueneberg

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