The former Georgia-Pacific sawmill in El Dorado that was resuscitated two years ago by a Canadian company will be closed over the next 60 days, putting 92 employees out of work.
A poor market for lumber forced the decision, said Ken Shields, chairman and chief executive officer of Conifex Timber Inc. of Vancouver, British Columbia.
The company announced in June that it was downgrading operations in El Dorado to a single shift "in order to optimize and upgrade operations during the current poor market conditions."
Six workers in El Dorado will be retained for support activities, including maintenance of equipment in the event of a restart, said Sandy Ferguson, a Conifex spokesman at its headquarters in Vancouver.
Conifex bought the El Dorado facility for $21 million in 2015, years after it had been shuttered by Georgia Pacific Corp. In 2017, the mill reopened after $80 million was put into improvements.
Ferguson said Conifex's intent two years ago to modernize the El Dorado plant, with a mix of restoring older equipment and buying new equipment, was always a two-phase plan.
"Rather than demolishing the mill to the ground, we tried to repurpose the mill into the equivalent of a modern mill," she said. "We'd hoped to complete the second phase later this year, but lower market prices made that impossible."
Conifex also operates a mill in Glenwood, which it purchased in 2018. It also went to a single shift in June.
The 106 workers in Glenwood will soon transition to a 12-hour workday, five days a week, Ferguson said.
In an earnings report Wednesday, Conifex reported revenue of $95.7 million in the second quarter this year, a 31% decline from the same quarter a year ago. "The lower revenues were largely attributable to the lumber segment, which recorded reduced shipments reflecting lower operating rates at our [British Columbia] and Arkansas mills and a decline in sales realizations due to weaker lumber prices, particularly compared to the second quarter of 2018," the company said.
The lumber market isn't forecast to improve anytime soon, Ferguson said. "We'll still be in tough times through the fall," she said.
Closing the El Dorado mill will reduce Conifex's lumber production in the southern U.S. by about 21 million board feet for the rest of 2019, the company said.