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Canada's Ainsworth Lumber Indefinitely Closing Mill

Company halting production at its Footner Forest Products Ltd. plant due to operating losses and reduced customer demand; move will affect 150 workers.

VANCOUVER — Ainsworth Lumber Co. Ltd. is indefinitely closing its jointly-owned Footner Forest Products Ltd. oriented strand board mill at High Level, Alta, just before Christmas, affecting 150 jobs.
The Vancouver company said late Tuesday the production will end Dec. 20 due to operating losses and reduced customer demand.
The High Level mill, which Ainsworth jointly owns with Ontario-based Grant Forest Products, employs 150 people and produces about 700 million square feet of the popular plywood substitute a year.
Bruce Rose, Ainsworth's general manager of corporate development, said the affected employees would be paid severance and provided with employment transition services.
''We're in a situation today where the new home construction starts in the United States is about half of where it was at the peak in late 2005,'' Rose said in an interview.
The Alberta mill had been operating on a reduced production schedule since October and had been planned to be closed for two weeks in December.
Rose estimated the plant had been operating at about 70 percent capacity.
''As far as the demand for products and other things it deteriorated over the last three weeks even more so, so we made some adjustments,'' Rose said.
The closure follows a decision by the company last week to take an extended holiday curtailment at its oriented strand board mill in 100 Mile House, B.C., from Dec. 20 through Jan. 1 due to a decline in orders.
In October, Ainsworth cut production at four other oriented strand board mills including operations in Minnesota, Ontario and Grande Prairie Alta.
Ainsworth, with about 1,800 employees at the end of last year, is North America's fourth largest producer of OSB and has seven mills with a combined annual production capacity of 3.1 billion square feet.
For the nine months ended Sept. 30, Ainsworth lost $32 million or $2.18 per share on sales of $443.4 million. That compared with a loss of $29.9 million or $2.04 per share on sales of $707.9 million in the same period a year ago.
Like most forestry companies, Ainsworth has been hit hard by the slumping U.S. housing market, which had been a major buyer of construction panels and materials.
New housing starts in the U.S. have been cut by more than a third in many U.S. markets because of troubles in the higher-risk subprime mortgage market, which has led to many foreclosures, lessened demand for housing and made it more difficult for many Americans trying to borrow for a house loan.
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