FORT ST. JOHN, B.C – Louisiana-Pacific Corporation announced its plan to restart production at the Peace Valley OSB Mill in Fort St. John on Tuesday.
Initiating the restart process was one of the expansion strategies Louisiana-Pacific released in its financial results report.
Prince George-Peace River-Northern Rockies MP Bob Zimmer says it’s a great sign for the area.
“Big mills like that just don’t open for a couple of months, they usually open with a long-term plan in mind,” says Zimmer.
According to growth projections, the Peace Valley OSB mill will ramp to full production capability by the second quarter of 2022.
The capacity of this mill is about 750 million square feet of 3/8th-inch panelling per year.
OSB stands for oriented strand board and is engineered by adding adhesives and compressing layers of wood strands in specific orientations.
LP CEO Brad Southern says the cost to resume production shall not exceed $12 million.
“We have begun the necessary engineering capital and rehiring planning to support the restart. The earliest expectation for the first press load is sometime in the third quarter. Full production capacity will be about a year later,” says Southern.
At the time of the shutdown, Southern remembers the Western Canadian OSB pricing zone was “one of the worst zones, if not the worst zone for selling OSB.”
“We struggled from a cost management standpoint at that mill in the past. It wasn’t a slam dunk when we looked at our network, but it became rather obvious through the analysis, that’s where we wanted to concentrate the shutdown,” says Southern.
According to the company’s yearly financial report, OSB sales went from $256 million in 2019 to $428 million in 2020. Net sales increased by 21 per cent to $2.8 billion in 2020.
“Pricing dynamics have changed across various regions. With the scale of that mill, it should be, and it was, originally designed to be one of the low-cost mills in the OSB industry.”
The Peace Valley OSB mill was closed in 2019 due to low lumber prices. At the time, nearly 200 residents worked at the mill.
Zimmer says it’s good to see the wood getting processed and value-added right here in Northeastern British Columbia.
“From the logger that takes the wood down to the trucker that brings it to the mill, the mill worker produces OSB, all the way down the line to the stores that sell it. It’s great to see our forest industry getting back on its feet again.”