Flavelle Sawmill in Port Moody, British Columbia, plans to add third shift after recently expanding to two shifts, adding 22 jobs; owner Mill and Timber plans to return to 24/7 production by year-end, says official

SASKATOON, Saskatchewan , March 28, 2014 () – For many Port Moody residents, the decades-old Flavelle Sawmill operating on the city's waterfront is either part of the community's economic engine, or an eyesore.

For the better part of the last decade, the demise of the cedar mill has been predicted and expected, but one thing seems certain, the mill isn't going anywhere in the near future.

Recently, the mill added a second shift, hiring 22 new people, and the company intends to add a third shift.

Bruce Gibson, the vice-president of real estate asset management for Mill and Timber, the company that owns the mill, told the Tri-Cities NOW the company has a goal of returning the mill to a 24/7 operation within the next year.

At full operation, the mill would employ 188 people.

The facility's turnaround is the result of several factors.

Gibson explained demand for wood in the U.S. is trending upwards as that country's housing market recovers.

He noted the numbers aren't exactly spiking quickly, but have grown slowly over the last couple of years.

As an example of where the market was, the typical number of housing starts in the U.S. is about 1.5 million a year.

When the market was booming in the middle of the 2000s, housing starts were at 2 million a year.

But by 2008 and 2009 during the recession, the number of starts dropped to below 500,000.

"Any industry that loses 75 per cent of their demand is going to have a tough time," Gibson said.

He noted Flavelle, which produces cedar - considered more of a decorative or finishing item rather than the dimensional lumber used for frame construction typically produced by Interior mills - has also managed to diversify by shipping products to China and Japan.

With the return of the U.S. demand, Gibson said the market is even better.

The story of Flavelle's turnaround is not an anomaly for Rick Jeffery, president and CEO of the Coast Forest Products Association.

"You're seeing people like Flavelle put on extra shifts and more hours, and they're not alone," he said.

Besides increased demand, the decline of the Canadian loonie is improving market conditions for mills along the coast.

Jeffery suggested Flavelle is in a better position than Interior mills because the specialty nature of its product is less subject to the commodity cycle. But the cycle can be vicious, and Jeffery cautioned that, during the good times, like the current period, there is the opportunity for the industry to be investing, either in new markets, new products or efficiencies in mills, to withstand the next downturn.

Jeffery also suggested Flavelle has its own challenges - namely, what he considers the "dirty little secret" that the land the mill sits on is very valuable and at some point in time the owner might decide it's worth more rezoned and redeveloped rather than used for a mill.

Flavelle officials said a number of years ago, as Port Moody started working on a new official community plan (OCP), various city administrations gave hints the mill should be turned into something else.

Gibson said the company decided to take part in the OCP discussion at the time, hiring architects and coming up with a vision, which was essentially a mixed-use neighbourhood development.

But the plan got mixed reviews from the public.

The draft OCP the city is now in the final steps of completing suggests the site should be considered for redevelopment uses other than general industry if the mill ceases operations.

Considerations include opening up the entire waterfront to the community with the potential for retail, residential, entertainment, open space and institutional/research facility use.

Port Moody Mayor Mike Clay sees both sides of the debate over the presence of the mill.

"While we want to keep good-paying quality jobs in Port Moody, you have to be careful ... is there an environmental impact from them running additional hours?" he said, adding the mill has always been willing to work with the city to address any issues.

Clay also said he wants every Port Moody business to do well, but added it's no secret he'd like to see something other than the mill on the site.

"I would like to see our waterfront used for recreation opportunities and not a mill," he said.

Meanwhile, Gibson suggested in 30 years, he's not sure what will be on the site of the Flavelle mill.

"We're fortunate enough to be in the position where we're able to hire some employees back and we're laying out plans to ramp up production," he said.

"At the same time as the OCP process happens, we'll continue to participate in that. If it makes sense for the mill to transition into the next phase of life, we're there to participate in it."


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