Northern B.C.'s Terrace sawmill reopens after a five-year hiatusConnections in China give new owners of old West Fraser mill a marketplace edge in a risky business
A sawmill that has been idle since 2007 reopened earlier this month in Terrace – and its new owners are optimistic of success, despite the mill's previous failure.
Unlike the Kitwanga mill, which restarted in June 2011 only to shut down again two months later, the owners of the newly retooled mill in Terrace might have a competitive edge that its former owners, West Fraser Mills Ltd. (TSX:WFT), didn't have: family connections in real estate and construction sectors in China.
"Whoever is trying to make some money up here on an industrial scale has to find new markets," said Skeena NDP MLA Robin Austin.
Whereas the old West Fraser Skeena Sawmill produced lumber for the North American market when it shut down in 2007, 60% to 65% of the lumber produced by the newly reopened mill will be exported to China, said Gian Sandhu, a management consultant working for Roc Holdings, which bought the mill from West Fraser in July 2011, along with associated tree farm licences.
Roc Holdings is owned by Teddy Cui. His family owns Shandong Riguang Group, which owns more than a dozen businesses in China ranging from real estate development to concrete and steel-making.
Cui and his wife, Sandra Wu, who have lived in Vancouver for more than a decade, have no background in forestry, but Sandhu said they believed their connections in China gave them a good business case to buy and reopen the old West Fraser mill.
Most of the timber exported to China is either high-value logs or forming lumber used in construction. Cui, who was in China last week and could not be reached for comment, has invested $6 million retooling the old Skeena mill. He plans to invest another $13 million to $15 million over the next 18 months.
Restarting the mill has created jobs for 50 mill workers and roughly 40 loggers, faller operators and truckers in logging operations connected with the mill.
"It's providing spinoff jobs as well," said Terrace Mayor Dave Pernarowski. "It's exciting to see the Skeena sawmill opened back up. Terrace has had a long history in the forestry and logging industry." •