Citing a shortage of wood, Vaagen Fibre Canada is closing its Midway sawmill indefinitely.
The company says it told its 85 employees as well as contractors, vendors, and suppliers of the move on Thursday.
“Our workers, their families, suppliers, and contractors will be impacted, not to mention the countless businesses our employees support like local restaurants, stores, and other general services in the rural communities in the local area,” the company said in a news release.
“Although the news we are sharing is not good news, we are steadfastly committed to continue to look for solutions for every possible way forward.”
Manager Dan McMaster said an interview that some people have been laid off immediately. The mill will run out its log inventory until mid-February and then begin a shutdown process.
The company noted it has operated without tenure for the last decade, meaning it doesn’t have a license to a Crown forest. Therefore it buys all of its logs on the open market from private landowners and woodlot owners.
Vaagen said “a few challenges have compounded” for them, leaving the future of the operation uncertain.
“This is an access to wood fibre at market price issue,” they said, adding they have put forward suggestions to the Ministry of Forests and have been working with local MLA Roly Russell to set up a meeting with new forests minister Bruce Ralston.
“The goal of this meeting is to review the solutions we believe could keep the mill viable for years to come,” they said.
“Our Vaagen family and team members are committed to finding solutions and doing all we can to keep Vaagen Fibre Canada viable, providing quality, good paying jobs, and supporting our rural communities.”
Vaagen said it appreciates the work of the Ministry of Forests, especially in the local office, and Russell’s efforts to keep the matter on the front burner. McMaster said some factors are beyond anyone’s control, but they are trying to position the mill to be profitable and hire back locals as soon as possible.
He said while they have had shutdowns before due to lack of logs, the problem has become more acute given rising costs and low lumber prices.
“One just has to look at all the other news out there of other mills such as Tolko and Canfor,” he said. “Even the major licensees are having a hard time to get fibre in a very low market. Everybody’s having shutdowns and Vaagen’s no different. It’s just when we’re a small community mill that affects so many people locally, I understand that it’s a little bit more of a news story.”
McMaster said although securing tenure could help in the long-term, their goal is to strengthen partnerships to find wood. The mill has longstanding relationships with the Osoyoos Indian Band and West Boundary Community Forest.
The mill, formerly operated by Pope and Talbot, closed in 2008. Vaagen noted local residents rallied to save the operation at the time.
They are asking residents to email Russell, the parliamentary secretary for rural development, to tell him the importance of the mill to local communities.
“We are confident that together, we can find solutions to turn this situation around,” the company said.
Another local forest company, Interfor, announced last fall that it would cut production 17 per cent. Although it did not spell out exactly what that would mean for the Grand Forks operation, they expected things to return to normal in January.