TORONTO, Dec. 14, 2020 /PRNewswire/ - Norbord Inc. (TSX
and NYSE: OSB) today announced that in response to increased
customer demand the Company intends to restart production at its
oriented strand board (OSB) mill in Chambord, Quebec in spring 2021.
Based on strong North American OSB demand forecasts and
indications from customers for the foreseeable future, Norbord
anticipates it will be unable to meet demand from its currently
operating mills. Following the adoption of its flexible operating
strategy earlier in the year and offsetting the recent loss of
capacity from the permanent closure of its 100 Mile House,
British Columbia mill, Norbord
intends to complete the preparatory work that will allow production
to restart at the Chambord mill.
The remaining work includes completing equipment installation and
commissioning the mill as well as employee recruitment.
"Norbord acquired the Chambord
mill in 2016 with the intention to one day return it to production,
and we are pleased that conditions now allow us to do just that,"
said Peter Wijnbergen, Norbord's President & CEO. "The mill is
well aligned with our business strategy and is well situated for
sales into the northeast region. We have made significant
investments and upgrades to position it as an important part of our
portfolio, and the Chambord mill
will be a meaningful contributor to our ability to meet our
customers' needs. The Saguenay-Lac-St-Jean region has a rich wood
products history, and we look forward to becoming a more
significant part of this community."
The restart of the Chambord
mill will enable Norbord to optimize production at its two
Quebec mills and to more
effectively serve customers in eastern Canada and the northeastern US. The Company is
targeting to commence production at Chambord in the spring of 2021, followed by a
typical start-up curve. Chambord
production will be able to substitute for products at the Company's
other mills, further bolstering Norbord's flexible operating
strategy. This flexible operating strategy, which has been employed
since the early days of the COVID-19 pandemic, now gives Norbord
the ability to cost-effectively adjust production across its mill
portfolio to more than offset the production from the Chambord mill if demand proves to be lower
than expected. Therefore, should demand decline, production
schedules across Norbord's platform will be able to be adjusted
quickly and cost-efficiently. After significant re-investment and
with a strong available labour force and committed wood supply in
the region, the Chambord mill is
expected to be among the Company's lowest cost operations once
fully ramped up.
Since Norbord acquired the mill in 2016, it has invested
approximately $54 million (C
$71 million) as at the end of the
third quarter of 2020 to prepare the mill for eventual
restart. In total, Norbord expects to invest approximately
$71 million (C $94 million).
Norbord has a wood allocation agreement in place with the Quebec
Ministry of Forests, Wildlife and Parks covering the vast majority
of the mill's anticipated fibre requirements. Chambord is located in the biggest
timber-producing region in Quebec,
and the Company expects to fill its remaining fibre needs from
private sources.
When fully operational, Norbord expects Chambord to employ approximately 120
people. The Chambord mill
has a total stated annual production capacity of 550 million square
feet (3/8-inch basis) and has been curtailed since 2008.
Norbord Profile
Norbord Inc. is a leading global manufacturer of wood-based
panels and the world's largest producer of oriented strand board
(OSB). In addition to OSB, Norbord manufactures particleboard,
medium density fibreboard and related value-added products. Norbord
has assets of approximately $2.1
billion and employs approximately 2,400 people at 17 plant
locations (15 operating) in the United
States, Canada and
Europe. Norbord is a publicly
traded company listed on the Toronto Stock Exchange and New York
Stock Exchange under the symbol "OSB".
This news release contains forward-looking statements, as
defined by applicable securities legislation, including statements
related to the Company's strategy, projects, plans, future
financial or operating performance and other statements that
express management's expectations or estimates of future
performance. Often, but not always, forward-looking statements can
be identified by the use of words such as "set up," "on track,"
"expect," "estimate," "forecast," "target," "outlook," "schedule,"
"represent," "continue," "intend," "should," "would," "could,"
"will," "can," "might," "may," and other expressions which are
predictions of or indicate future events, trends or prospects and
which do not relate to historical matters identify forward-looking
statements. Forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Norbord to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements.
Although Norbord believes it has a reasonable basis for
making these forward-looking statements, readers are cautioned not
to place undue reliance on such forward-looking information. By its
nature, forward-looking information involves numerous assumptions,
inherent risks and uncertainties, both general and specific, which
contribute to the possibility that the predictions, forecasts and
other forward-looking statements will not occur. These factors
include, but are not limited to: (1) developments related to
COVID-19 or any other plague, epidemic, pandemic, outbreak of
infectious disease or any other public health crisis, including
health and safety measures instituted to protect the Company's
employees, government-imposed restrictions or other restrictions
that may apply to the Company's employees and/or operations
(including quarantine), the impact on customer demand, supply and
distribution and other factors; (2) assumptions in connection with
the economic and financial conditions in the US, Europe, Canada and globally; (3) risks inherent to
product concentration and cyclicality; (4) effects of competition
and product pricing pressures; (5) risks inherent to customer
dependence; (6) effects of variations in the price and availability
of manufacturing inputs, including continued access to fibre
resources at competitive prices and the impact of third-party
certification standards; (7) availability of transportation
services, including truck and rail services, and port facilities;
(8) various events that could disrupt operations, including
natural, man-made or catastrophic events and ongoing relations with
employees; (9) impact of changes to, or non-compliance with,
environmental or other regulations; (10) government restrictions,
standards or regulations intended to reduce greenhouse gas
emissions; (11) impact of weather and climate change on Norbord's
operations or the operations or demand of its suppliers and
customers; (12) impact of any product liability claims in excess of
insurance coverage; (13) risks inherent to a capital intensive
industry; (14) impact of future outcomes of tax exposures; (15)
potential future changes in tax laws, including tax rates; (16)
effects of currency exposures and exchange rate fluctuations; (17)
future operating costs; (18) availability of financing, bank lines,
securitization programs and/or other means of liquidity; (19)
impact of future cross-border trade rulings or agreements; (20)
implementation of important strategic initiatives and
identification, completion and integration of acquisitions; (21)
ability to implement new or upgraded information technology
infrastructure; (22) impact of information technology service
disruptions or failures; and (23) changes in government policy and
regulation.
The above list of important factors affecting forward-looking
information is not exhaustive. Additional factors are noted
elsewhere, and reference should be made to the other risks
discussed in filings with Canadian and US securities regulatory
authorities. Except as required by applicable law, Norbord does not
undertake to update any forward-looking statements, whether written
or oral, that may be made from time to time by, or on behalf of,
the Company, whether as a result of new information, future events
or otherwise, or to publicly update or revise the above list of
factors affecting this information. See the "Forward-Looking
Statements" section in the February 4,
2020 Annual Information Form and the cautionary statement
contained in the "Forward-Looking Statements" section
of the 2019 Management's Discussion and Analysis
dated February 4, 2020 and Q3 2020
Management's Discussion and Analysis dated November 4, 2020.
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SOURCE Norbord Inc.