Jemi Fibre on forestry buying spree in the East Kootenay

by Keith Powell — May 09, 2014

Exterior of Kootenay Wood Preserves building in Cranbrook BC

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In addition to the almost 50,000 hectare purchase of Tembec lands, Jemi Fibre based in Vancouver also recently acquired three wood manufacturing companies in the region, namely WoodEx Industries, KWP, and Prairie Holdings.

Jemi Fibre Corp. of Nanaimo, BC, signed a letter of intent with WoodEx Industries Ltd. to acquire all of its issued and outstanding shares and a letter of intent with Kootenay Wood Preservers Ltd. and Prairie Holdings Inc. to acquire all of the issued and outstanding shares of KWP and Prairie -- deal has since been finalized.

WoodEx operates a sawmill located in Edgewater, BC. The sawmill is situated on about 50 acres of land and on a nominal board foot basis, has capacity to produce about 110 million BFM per annum. Its principal wood product is designed for the Japanese housing market. Kootenay Wood Preserves, (KWP) is a post peeling and treatment operation and plant, with its principal operations located in Cranbrook, BC, on about 70 acres of land. It produces treated timber products for agricultural, highway and telephone pole use. Prairie Holdings is a contract logger operating in the Kootenay region of BC. It has a current run rate of approximately 250,000 cubic metres of logging per annum.

When Tembec sold approximately 49,500 hectares of land in British Columbia it was also to Jemi Fibre Corp. for $35 million. The transaction is taking place in two phases, with completion scheduled for September. The forest products manufacturer said the transaction of land includes a seven year earn-out provision for Tembec would be entitled to additional payments of at least $2.1 million.

The first phase of closing is scheduled for June and involves the sale of approximately 17,700 hectares for $15 million. The second phase, scheduled for completion in September, involves the sale of the remaining 31,800 hectares for $20 million. Tembec still has 7,400 hectares it is looking to sell to interested buyers.

Michael Ainsworth is the company’s CEO and the company trades on the TSX Venture Exchange, stock prices are sitting at about .20 cents a share down from a high of .59 cents earlier this year.