Interfor Corp. logo is shown in a handout. The company says it is selling its three manufacturing facilities in Quebec and closing its corporate office in Montreal as it plans to leave the province and focus on other parts of the company. THE CANADIAN PRESS/HO

BURNABY, B.C. - Interfor Corp. is selling its three manufacturing facilities in Quebec and closing its corporate office in Montreal as the lumber producer plans to leave the province and focus on other parts of the company.

Interfor chief executive Ian Fillinger said Wednesday the decision to exit its Quebec operations was influenced by recent developments that have restricted the availability of economic fibre, including record forest fires in 2023.

"This divestiture enables us to focus resources on our remaining eastern Canadian sawmills situated in Ontario and New Brunswick, which are well-positioned with competitive log costs and an increasingly valuable spruce-pine-fir lumber product mix," Fillinger said in a statement.

The company says it has signed a deal to sell its sawmills in Val-d’Or and Matagami as well as its Sullivan remanufacturing plant in Val-d’Or, along with all associated forestry and business operations, to Chantiers Chibougamau Ltée (CCL) for $30 million in cash.

Interfor and CCL will also enter into a multi-year contract for the supply of machine stress rated lumber to Interfor's I-Joist engineered wood products facility in Sault Ste. Marie, Ont.

Chantiers Chibougamau, a privately held, Quebec-based forestry company, said about 300 employees will join the company once the deal is complete.

"As we sign this agreement, our goal is to preserve as much of the historical activities we are integrating while safeguarding our current operations and teams in Béarn, La Sarre, Landrienne, Chibougamau, and Lebel-sur-Quévillon," said Frédéric Verreault, Chantiers Chibougamau's executive director of corporate development.

"However, we remain mindful of the wood supply shortage affecting all the sawmills we operate. We will conduct a full review of all activities covered by the transaction after closing, and final plans can only be established at that time."

Interfor said it expects to take an impairment charge in its third quarter associated with the announcement.

The sale does not include any countervailing or anti-dumping duty deposits related to the ongoing U.S.-Canada softwood lumber trade dispute.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:IFP)

News from © The Canadian Press, 2024