The purchase by Canfor Corp. of Anthony Forest Products is just the latest in a series of acquisitions by Canadian companies of sawmills and lumber manufacturers in Arkansas and other Southern states.
The reason? Climate change.
A mountain pine beetle epidemic that began in the 1990s had by 2012 killed 946 million cubic yards of pine trees in British Columbia. More than 45 million acres of forest have been affected.
Milder winters and warmer summers have meant higher survival rates for the pest.
“Successive years of favourable summer and winter weather combined with an abundance of mature suitable pine hosts on the landscape have been cited as factors contributing to the massive epidemic that occurred in the 1990s and 2000s in British Columbia,” Canada’s natural resources agency said.
So Canadian forest products companies like Canfor, West Fraser and Interfor have turned their eyes southward, buying sawmills and other lumber-producing facilities to meet demand.
“They each had kind of carved out a geographic niche in the United States, and I didn’t know if they had an understanding among themselves. But for whatever reason they’ve decided to lock horns in Arkansas,” said Steve Anthony, president of Anthony Timberlands of Bearden. (Anthony Timberlands is a completely separate company from Anthony Forest Products.)
“Five years ago, you couldn’t give away a sawmill,” he said. “Basically, you ran out of money and you just shut it down and closed it forever.
“This is one of those generational opportunities. If you ever want to get out and get paid, this is the time,” Anthony said.
Recent Canadian Purchases in Arkansas
March — West Fraser of Vancouver announces it’s buying Travis Lumber Co. of Mansfield, a sawmill and lumber manufacturing business that produced more than 100 million board feet of lumber in 2013.
April — West Fraser announces it’s buying Bibler Brothers Lumber, a Russellville sawmill and lumber manufacturer that produced about 136 million bf in 2013.
May — Interfor of Vancouver says it’s paying $29.3 million to The Price Cos. Inc. of Monticello for its sawmill in Monticello, which produced about 75 million bf in the 12 months ending March 31.
August — Conifex Timber Inc. of Vancouver announces it has paid $21 million for a closed Georgia-Pacific sawmill and related facilities south of El Dorado.
September — Canfor Corp. of Vancouver says it’s buying Anthony Forest Products Co. of El Dorado for $93.5 million.