TSX:WFG - Post Discussion
Post by
retiredcf on Jan 10, 2024 9:19am
RBC
January 9, 2024
West Fraser Timber Co. Ltd.
Announces closure of Maxville sawmill, indefinite curtailment of Huttig sawmill
NYSE: WFG | USD 86.34 | Outperform | Price Target USD 97.00
Sentiment: Neutral
Closing Maxville, indefinitely curtailing Huttig. West Fraser announced that it will close its sawmill in Maxville, Florida, and indefinitely curtail its sawmill in Huttig, Arkansas, by the end of January. Together, these actions will reduce its lumber capacity by 270 mmfbm (equivalent to ~4% of the company's total lumber capacity as of YE22). The company highlighted high fiber costs and soft lumber markets as key drivers of the decision. The company expects to take restructuring and impairment charges of ~ $50MM in Q423 as a result.
Maxville closure follows Perry's indefinite curtailment. West Fraser announced an indefinite curtailment of its Perry, Florida sawmill in January 2023. We think high fibre costs in Florida can be a challenge for companies operating in the region. Of note, West Fraser operates two other sawmills in northern Florida near Maxville (Lake Butler and Whitehouse), and we would expect Maxville's closure could help fibre costs for those mills at the margin.
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