70 people lose jobs
Dollar | High loonie leads to mill closure
By MICHAEL STAPLES
staples.michael@dailygleaner.com
Published Friday September 28th, 2007
Appeared on page A1
The high Canadian dollar is behind the closure of Fredericton's M.L. Wilkins and Son Ltd. Sawmill.
The move leaves 70 workers wondering what their future will be.
Brent Wilkins, vice-president of the company, told The Daily Gleaner on Thursday he hopes the company can reopen in two to three weeks, but wasn't making a commitment.
"I am very confident and quite optimistic," Wilkins said with regard to that time frame.
He said everything depends on what happens with the Canadian dollar, hovering at or near par to the U.S. greenback.
"It was the final straw at this point in time," Wilkins said.
The company vice-president said most of M.L. Wilkins's exports over the last year have been to the United Kingdom and Ireland. The high loonie has affected those exchanges too, he said.
The family mill, in operation since 1969, had modified its production process to meet new market opportunities.
"Until we have an improving dollar or come up with a better game plan, it's a difficult situation," Wilkins said between meetings Thursday.
With the inventory on-hand, the operation should be able to comply with its overseas orders, he said.
Wilkins said the decision to close was made Wednesday night, and the employees have been advised to file for employment insurance.
A security crew and some office staff will remain on the scene.
The usually busy mill yard looked like a ghost town Thursday with a bare minimum of activity.
A "sorry we're closed" sign hung on the front of the outside entrance to the company's store and offices. A forklift operator could be seen loading bundles of inventory on the back of a flatbed tractor-trailer.
"The forestry industry sucks, but they have tried very hard here," said Corey Fullarton, an eight-year employee.
Fullarton said he believed the shutdown would be short, but admitted the closure didn't come as a huge surprise.
He said things have been "kind of tough" at the mill and morale has been low.
Ken Hardie, manager of the New Brunswick Federation of Woodlot Owners, said the closure was another major blow for members.
"M.L. Wilkins was one of the better customers in the province and bought quite a lot of woodlot wood," he said.
Hardie complimented the Wilkins operation for being progressive in developing overseas markets, but he said even that may not be enough.
"It's extremely difficult times," he said. "It's been every week for the past month now that we've seen mills close down."
Operations in Miramichi, Blackville, Petitcodiac and Juniper have shut down in recent weeks -- with about a third of the 63 mills operating on reduced hours.
Shawn Church, editor of Random Lengths, a U.S.-based weekly publication that provides the wood products industry in Canada and the U.S. with reports of market activity, trends, issues, and analysis, said watchers should prepare themselves for more closures.
"I think that the industry as a whole is bracing for a tough winter and even a tough 2008," Church said in a telephone interview from his office in Eugene, Ore.
"It's very possible that we could see more of this as we move through the winter."
Church said the trend of sawmills closing because of the rising loonie is a Canada-wide problem.
"Mill closures have happened in both the west and the east, with the exchange rate being a major factor in the decision to pull the plug."
To make matters even worse for Canadian mill operators, other factors have also come into play, Church said, with regard to exports to the U.S.
They include an export tax on products going south, and the fact that lumber prices are at an historical low because of a housing recession in the U.S.
"Once the U.S. starts to pull out of this historic downturn in housing and wood products supply and demand changes, prices will rise and, of course, that will help."