2022 A Tough Year For Canfor

March 3, 2023

Kevin Edgson is the CPPI President and Chief Executive

PRINCE GEORGE – It was a difficult 2022 for Canfor Pulp Profits Inc.

The forestry company posted an operating loss of $106 million for 2022, up from $65.5 million in 2021. Fibre shortages in B.C., global supply chain disruptions and operational efficiency and reliability challenges at all of their pulp mills contributed to the negative results.

For the fourth quarter of 2022, the Company reported an operating loss of $91.1 million, and CPPI President and Chief Executive Officer Kevin Edgson stated “This was a difficult quarter to end a challenging year for Canfor Pulp. Our pulp business faced many uncontrollable challenges this year, but especially in the fourth quarter, including material fibre supply disruptions as a result of sawmill curtailments.”

As a result of the performance, Canfor announced early in 2023 that it will permanently close the pulp line at its Prince George Pulp and Paper Mill.

“The decision to shut down the pulp line at Prince George Pulp and Paper mill was extremely difficult, but necessary, in order to right-size our operating platform and set the Company up for a sustainable long-term future,” Edgson adds. “We are working to support our employees through these transitions and regret the impact these decisions have on our employees, their families and the local community. We want to recognize our employees for their dedication and resilience as we work through these significant changes in the organization.”

In recent weeks, global softwood kraft pulp market conditions have experienced a modest uptick, and the company  announced a US$30 per tonne increase to its NBSK pulp list price to China in February 2023 to US$970 per tonne. Looking forward, global softwood kraft pulp markets are projected to remain relatively stable through the balance of the first quarter of 2023, as persistent high global pulp inventory levels and additional hardwood pulp capacity predicted to come online in 2023, combine with steady Chinese demand.

Canfor notes that notwithstanding the projected increased supply, global pulp pricing is anticipated to remain above historic average price levels in the short-term. No major maintenance outages are planned for the first and second quarters of 2023. In the third quarter of 2023, a maintenance outage is currently planned at Northwood, with a projected 25,000 tonnes of reduced NBSK pulp production.

Business Examiner Staff

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