VANCOUVER, Dec 15 (Reuters) - Canfor Corp's spending to upgrade sawmill efficiency will involve both its Canadian and U.S. operations, but the exact projects have yet to be decided, a spokesman said on Wednesday.
North America's No. 3 softwood lumber producer announced late on Tuesday it plans C$145 million in capital spending next year, with C$120 million earmarked for 'improvement' projects at its sawmills and the rest for maintenance.
The money is part of a three-year plan in which Canfor expects to spend C$300 million on improvements at its facilities, which are primarily based in Western Canada and the southeastern United States.
'Some of it will be spent in Canada, and some of it will be spent in the United States,' spokesman David Lefebvre said.
Final decision over what projects will receive the money will be made over the next few months, Lefebvre said.
Like most major North American lumber producers, Canfor kept capital spending at low levels in recent years to conserve cash as it waited for demand for construction lumber to improve.
Although North American demand remains weak, Canfor's western Canadian mills have benefited from a sharp increase in demand from China.
Canfor executives say the company wanted to make the investments now in expectation that North American demand will begin to improve.
Canfor's larger rival, West Fraser Timber Co, announced in September it will spend C$125 million on capital projects over the next 18 months.
Much of West Fraser's spending is expected to be at its smaller sawmills in the U.S. South, many of which it bought just as the housing market was falling apart -- limiting its ability to upgrade the facilities.
Canfor's shares in Toronto ended up 48 Canadian cents at C$10.90 on Wednesday.
($1=$1.00 Canadian)
(Reporting Allan Dowd; editing by Rob Wilson) Keywords: CANFOR/ (allan.dowd@thomsonreuters.com; 1+604 664 7314; Messaging: allan.dowd.reuters.com@reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
North America's No. 3 softwood lumber producer announced late on Tuesday it plans C$145 million in capital spending next year, with C$120 million earmarked for 'improvement' projects at its sawmills and the rest for maintenance.
The money is part of a three-year plan in which Canfor expects to spend C$300 million on improvements at its facilities, which are primarily based in Western Canada and the southeastern United States.
'Some of it will be spent in Canada, and some of it will be spent in the United States,' spokesman David Lefebvre said.
Final decision over what projects will receive the money will be made over the next few months, Lefebvre said.
Like most major North American lumber producers, Canfor kept capital spending at low levels in recent years to conserve cash as it waited for demand for construction lumber to improve.
Although North American demand remains weak, Canfor's western Canadian mills have benefited from a sharp increase in demand from China.
Canfor executives say the company wanted to make the investments now in expectation that North American demand will begin to improve.
Canfor's larger rival, West Fraser Timber Co, announced in September it will spend C$125 million on capital projects over the next 18 months.
Much of West Fraser's spending is expected to be at its smaller sawmills in the U.S. South, many of which it bought just as the housing market was falling apart -- limiting its ability to upgrade the facilities.
Canfor's shares in Toronto ended up 48 Canadian cents at C$10.90 on Wednesday.
($1=$1.00 Canadian)
(Reporting Allan Dowd; editing by Rob Wilson) Keywords: CANFOR/ (allan.dowd@thomsonreuters.com; 1+604 664 7314; Messaging: allan.dowd.reuters.com@reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.