Also very interesting to see the contrast between West Fraser and Canfor since the financial crisis. Both groups pursued diversification through acquisitions in the US/Europe but West Fraser has been the clear winner.
Hi Luke: West Fraser has some great mills although I suspect their engineered wood products primarily OSB focus (including well timed Norbord purchase) has made the difference. Canfor Pulp is like that story Buffett told where a farmer asks a vet what to do with his horse that sometimes limps. The vet replies, when it is not limping sell it! Expensive to mothball CFX (ignoring PG mill/chips/AAC) so I think you do what they are doing, try to run for cash and wait. I do not pretend to know what outcome may take place but I do trust CFP to sort this out. What do you think?
I think that the forestry sector has been like the mining sector… high capex, “me too” acquisitions, cyclical pricing, challenging environmental restrictions, and the list goes on!
But every industry can experience changes. We have seen this to some extent with the Oil & Gas sector where shareholders just got fed up.
My view is that the forestry sector could come around to be more shareholder friendly.
Canfor should accept that Canfor Pulp as a standalone entity was dumb and do a share swap with the public shareholders at no premium.
Canfor can make it through this downturn and should communicate to the market that it will be more shareholder friendly going forward.
With the geographic diversification they now have I think they have the upper hand in dealing with the Government in BC which has utterly failed the forestry sector.
This will be an interesting one to watch play out!
Also very interesting to see the contrast between West Fraser and Canfor since the financial crisis. Both groups pursued diversification through acquisitions in the US/Europe but West Fraser has been the clear winner.
Hi Luke: West Fraser has some great mills although I suspect their engineered wood products primarily OSB focus (including well timed Norbord purchase) has made the difference. Canfor Pulp is like that story Buffett told where a farmer asks a vet what to do with his horse that sometimes limps. The vet replies, when it is not limping sell it! Expensive to mothball CFX (ignoring PG mill/chips/AAC) so I think you do what they are doing, try to run for cash and wait. I do not pretend to know what outcome may take place but I do trust CFP to sort this out. What do you think?
I think that the forestry sector has been like the mining sector… high capex, “me too” acquisitions, cyclical pricing, challenging environmental restrictions, and the list goes on!
But every industry can experience changes. We have seen this to some extent with the Oil & Gas sector where shareholders just got fed up.
My view is that the forestry sector could come around to be more shareholder friendly.
Canfor should accept that Canfor Pulp as a standalone entity was dumb and do a share swap with the public shareholders at no premium.
Canfor can make it through this downturn and should communicate to the market that it will be more shareholder friendly going forward.
With the geographic diversification they now have I think they have the upper hand in dealing with the Government in BC which has utterly failed the forestry sector.
This will be an interesting one to watch play out!
Your Canfor position is a very interesting one to me Tim!
What is your view regarding the Canfor Pulp and its future as a standalone business?