Tembec Inc. is looking to sell its Skookumchuck pulp mill to stem losses

Will Canfor step up to the plate and add to its holdings in the East Kootenay with the purchase of the Skookumchuck pulp mill? As the major fibre supplier to the Skookumchuck pulp mill and an $80 million dollar investment in two of its sawmills (Radium and Elko) – it would seem that a Canfor purchase of the profitable mill makes sense.

The Montreal-based forestry company Tembec recently posted a $10 million loss in its fourth-quarter earnings for the end of 2012. That's an improvement over the same period of 2011, which had a loss of $16 million.

While B.C. forestry companies have been enjoying a surge in business in recent months, due to a recovery in the U.S. housing market, Tembec has seen profits fall in its lumber, pulp and paper divisions, according to its recent fourth-quarter financials.

The Skookumchuck pulp mill north of Cranbrook employs roughly 280 workers -- and is one of the largest regional employers. Tembec's only other B.C. asset was its Chetwynd pulp mill, which was idled indefinitely in September 2012, putting 115 mill workers out of work.

Linda Coates, vice-president of human resources and corporate affairs for Tembec, said the company is in discussion with a number of potential buyers for the Skookumchuck mill.

"The (Skookumchuck) pulp plant is the only NBSK pulp plant in the company's portfolio," Coates said in an interview with Business in Vancouver. "That is a profitable plant, but probably would be better in a bigger company that concentrates on that sector."

Once the Skookumchuck mill is sold, Tembec would have no other significant assets in B.C. Last year, it sold its Elko and Canal Flats sawmills, along with its associated timber holds, to Canfor Corp.

Source: Business in Vancouver