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West Fraser to invest US$300m in buying sawmill

26.10.2021 − 

Following the takeover of Norbord completed at the beginning of February and the ensuing substantial enlargement in wood-based panel capacity, West Fraser Timber is currently preparing the next major step in its expansion in the sawnwood business.

In mid-October, the company came to an agreement with the previous owner High Roller Group (HRG) on the acquisition of the sawmill in Lufkin, Texas, trading under the name of Angelina Forest Products. The purchase price was set at around US$300m subject to possible adjustments after closure of the deal. The transaction in to be completed during the course of the next few months upon receipt of the required approvals. West Fraser justifies the purchase price essentially on the grounds that the costs of building a new sawmill of the same size and quality as Lufkin plus the working capital investments and the lost cash flow expected during the construction and start-up phase would exceed the purchase price.

The Angelina Forest Products works is one of the newer southern yellow-pine sawmills in the south of the USA. Building work began in 2018. The start-up took place at the end of 2019. At that time, a total of US$100m was given as the cost of the investment for the works that was originally projected at 200m bdft per year. On the basis of the present planning, annual sawnwood production is to be ramped up to around 305m bdft over the next three to four years.

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