Interfor to Exit Québec Operations, Selling Sawmills to Chantiers Chibougamau

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Interfor Corporation revealed plans to exit its operations in Québec. The company will sell its three manufacturing facilities in Val-d’Or and Matagami, along with its corporate office in Montréal.

This decision allows Interfor to refocus on regions with greater growth potential, as stated in the company’s press release.

The company has signed a definitive agreement with Chantiers Chibougamau Ltée (CCL), a privately-held forestry firm based in Québec, for the sale of its sawmills in Val-d’Or and Matagami, as well as its Sullivan remanufacturing plant. The deal, valued at approximately $30 million, is set to close by the end of 2024, pending regulatory approvals.

In addition to the sale, Interfor and CCL will enter into a multi-year supply agreement for Machine Stress Rated (MSR) lumber to be used in Interfor’s engineered wood products facility in Sault Ste. Marie, Ontario. However, the transaction does not include countervailing and anti-dumping duty deposits related to the U.S.-Canada softwood lumber dispute, which will remain with Interfor.

Interfor's exit from Québec is driven by challenges such as limited fibre availability, exacerbated by record forest fires in 2023. According to Ian Fillinger, President and CEO of Interfor, "After careful review of the potential future options for our Québec operations, we believe the sale to CCL is the best long-term outcome for Interfor."

Despite this divestiture, Interfor will maintain its presence in Eastern Canada with five sawmills and an engineered wood products facility in Ontario, as well as two sawmills and woodlands management operations in New Brunswick.

The Québec sawmills, which have a combined production capacity of 255 million board feet annually, have been operating below full capacity, producing only 206 million board feet over the past year. Recent utilization rates have fallen to about 50%.

The company anticipates recording an impairment charge in the third quarter of 2024 in connection with the planned exit.