Lumber producers face rail transportation nightmare
Transportation on the rails continued to be a complete nightmare in Canada as most rail cars failed to materialize.
Canadian National Railway Co. (TSX: T.CNR, Stock Forum)and Canadian Pacific Railway Ltd. (TSX: T.CP, Stock Forum) both claimed the terrible weather was responsible, but mills wondered as to the absolute inconsistency of service. Most operators struggled to find trucks to replace their missing rail cars.
Those in the east suffered the most from these ongoing transportation woes.
US sawmills produced 27.66 billion board feet (bbf) of softwood lumber in the first 11 months of 2013 – up 5.7 per cent from 26.161 bbf a year earlier, according to the Western Wood Products Association’s Lumber Track, released Monday.
Canadian sawmills produced 22.726 bbf of softwood lumber in the 11 months – an increase of 5.4 per cent year-over-year from 21.569 bbf.
In lumber company news, International Forest Products Ltd. (TSX: T.IFP.A, Stock Forum), or Interfor, out of Vancouver, BC, Thursday reported net earnings of $11.4 million or $0.18 per share in 4Q 2013, compared to net losses of $0.1 million or $0.00 per share in 3Q and $3.8 million or $0.07 per share in 4Q 2012.
Also this week, Interfor agreed to purchase operations including two Georgia sawmills for US$180 million from Ilim Timber Continental SA to expand in the US Southeast. Interfor said its annual capacity to produce lumber will increase by about 20 per cent with the purchase of Tolleson Ilim Lumber Co. Interfor will pay US$129.9 million in cash and retained liabilities, plus 3.68 million shares for the Perry, GA-based business.
The company plans to evaluate international marketing initiatives with Ilim Lumber, including serving as a sales agent in North America and cooperation in China, Japan and the Middle East.