Family sawmill in Merritt to close; 50 jobs to be lost

Ardew Wood Products owners blame tight supply of good quality timber for closure
Merritt timber supply: allowable versus actual annual cuts

A family-owned sawmill in Merritt that operated for nearly half a decade will close in January, putting more than 50 people out of work.

The Ardew Wood Products Ltd. sawmill, which recently announced it will close January 11, 2013, blames a lack of logs for the shutdown.

The provincial government insists the mill has an adequate timber supply and that its owners are looking to sell it.

"There is still plenty of timber available in the Merritt timber supply area," Brennan Clarke, public affairs officer for the Ministry of Forests, Lands and Natural Resource Operations, told Business in Vancouver. "We understand Ardew is looking for a buyer for its operation."

The mill's owner, Erik Norgaard, could not be reached for comment.

Two other larger mills in Merritt remain in operation: Aspen Planers and Tolko Industries Ltd.'s Nicola Valley division sawmill. In 2010, Aspen Planers invested $20 million upgrading its Merritt mill.

But the ministry's mid-term timber supply report for the Merritt area paints a picture of a timber supply that's being rapidly exhausted.

According to the report, the annual allowable cut (AAC) for the Merritt timber supply area was exceeded by 41% in 2011.

Between 2007 and 2011, the harvest levels were, on average, 18% above the AAC.

David Gray, a spokesman for the Aspen Planers sawmill in Merritt, said all mills in the Merritt area are struggling, due largely to the mountain pine beetle infestation, which created a windfall of timber, but much of it is poor quality.

"Ardew is not alone," Gray said. "Erik has put his life into this business. The forest [ministry's] response strikes me as a little glib, when you've got someone that's put his whole family's life into this enterprise and has said 'I can't do it anymore.'"

Ardew has access to 66,926 cubic metres of timber per year from its own forest licences and 150,000 cubic metres of dead yellow pine that was recently awarded.

"There is also a large amount of timber that's available for competitive bid from B.C. Timber Sales," Clarke said.

But as Gray pointed out, there's a big difference in the quality of lumber produced by Ardew and other Merritt mills.

"The challenge Ardew has is that it makes a very high-quality, highly specialized product that requires a good log, and the good logs are the ones that are in real shortage," Gray said. "We've been operating on a diet of crummy logs for a couple of years – bug-killed, blue-stained logs. Our market reflects a poorer quality of logs that are available to us."

"Securing adequate timber supply is a continuous challenge faced by all companies operating within the forestry sector," added Michael Bragg, manager of forestry for Tolko's Thompson Nicola Woodlands.

"Tolko products and markets are more diversified, allowing us to use a variety of fibre from a variety of sources."

John Allen, CEO of the Council of Forest Industries, said he's not surprised to hear the Ardew mill is closing.

"Timber supply is tight in the Merritt area. There's going to be increasing fibre shortages in the Interior and mill closures, but which ones and when and where is pretty complicated."

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