After a month-long hiatus, Kenora Forest Products is back up and running. On July 24, the company laid off 125 people citing low lumber prices and high tariffs, as a factor in the decision to shutdown the mill.
Having bills to pay and an increase in lumber prices helped in the decision of whether or not to start operations again, says mill manager Rod McKay.
“In an operation like this, you still have fixed costs like taxes even without a wheel turning,” says McKay. “It was felt that it would be better to be operating and, with the prices up even more than they were when we were operating before, this was a good time to start up again.”
The mill produces 75 million board feet of lumber a year, McKay says. Lumber prices have increased from $280 per 1,000 board feet to around $380 per 1,000 board feet.
Decisions by a NAFTA panel calling for a recalculation of softwood duties and a sudden shortage of lumber brought about by forest fires in British Columbia have increased prices for lumber, says McKay.
In this market, “we should be close to breaking even,” he says. “We’re just glad to see where we are today. There’s so much politics in the softwood issue, it’s difficult to predict anything for the future.”
