Tolko Industries Ltd.

Tolko Industries Ltd.

January 12, 2006 10:00 ET

Tolko Announces Closure of Manitoba Sawmill Operations

THE PAS, MANITOBA--(CCNMatthews - Jan. 12, 2006) - Tolko Industries Ltd. told its employees at its Manitoba solid wood lumber manufacturing operation earlier today that its Board of Directors has instructed management to permanently close its sawmill operation in The Pas effective April 19, 2006.

"The solid wood operation has been financially challenging since Tolko acquired it in 1997," says Mike Harkies, Vice President & General Manager, Lumber and Plywood Operations. "We have invested significant capital in the sawmill over the last eight years, but despite this investment its financial performance is unacceptable. Since early November we've been in discussions with the province of Manitoba, the Union and the town of The Pas in an attempt to find solutions to prevent a closure. Unfortunately, even though some progress was made, it wasn't enough to allow us to continue. We will continue to work with all stakeholders to seek and implement a financial stabilization plan that will allow us to continue operations. However, if we haven't reached an acceptable agreement by January 20, 2006, logging will be curtailed, and the closure will be irrevocable."

Harkies added that high log costs, escalating fuel costs, the ongoing softwood lumber trade dispute with the US and the strength of the Canadian dollar have compounded the challenges the operation faces.

Richard Huff, Vice President & General Manager, Kraft Paper & OSB Operations says Tolko intends to continue operations at its Kraft paper mill in The Pas at this time and will implement a round wood chipping plan to provide fibre for the mill. "We will now focus our attention on the ongoing viability of the Kraft paper mill as we continue to serve the needs of our specialty papers customers," says Huff.

The sawmill directly employs 227 full time employees who will be treated fairly as required by the Manitoba Employment Standards Code. The sawmill closure will remove 185 million board feet of lumber from the marketplace.

"A decision of this magnitude is very difficult," says Harkies. "We fully understand and regret the impact this closure will have on our employees and the community. Unfortunately, sometimes tough choices have to be made to ensure Tolko's continued viability in an increasingly competitive industry."

Contact Information

  • Tolko Industries Ltd.
    Sheila Catlin
    Manager, Corporate Communications Services
    (250) 549-5326