Forest products company Tembec’s losses soared in the fourth quarter even though its lumber business enjoyed its best quarter in several years due to a gradual recovery in the U.S. housing starts that improved demand and prices.
The Montreal-based pulp, paper and lumber producer lost $47 million or 47 cents per share for the quarter ended Sept. 29. That compared with a net loss of 17 cents per share or $17 million in the comparable prior-year period.
The higher losses was largely due to a $50-million, non-cash impairment charge due to the idling in September of its pulp mill in Chetwynd, B.C., due to weak market conditions. A total of 115 employees work at the mill, which Tembec purchased in 2002.
The high-yield pulp produced at the mill is used in printing and writing papers, paperboard as well as tissue and towelling. Production from Chetwynd, which had an annual capacity of 240,000 tons, was shipped primarily to Asia.