Contrary to some news reports, Lauzon Hardwood Flooring is not preparing to shutter its operations. So said David Lauzon, Jr., the company’s director of sales, in response to erroneous reporting from local media in the wake of the closure of a paper mill located near its facilities.
The paper mill, Quebec-based Fortress in Thurso, bought non-flooring grade wood chips from Lauzon, which was authorized to harvest the lumber from the forest. The paper mill announced its closure back in October, leaving Lauzon without a large buyer for the pulp-grade lumber.
“When we go into the forests that is government-owned land, we don’t just bring back timber that’s good for our sawmill,” Lauzon stated. “We are the ones in charge of bringing back all the pulp—those trees that don’t meet the standards for the sawmill or finished products. We put this pulp into a chipper, and that’s what the paper mills use for their manufacturing process. By doing this we can clean up the forests at the same time.”
When the paper mill closed a few months back, over 300 jobs were lost in the small town of Thurso—which has a population of 3,000—where the Lauzon sawmill is located. The local Quebec media estimated 165 jobs would be impacted when Lauzon announced modifications to their log supply. Lauzon disputes this figure, adding the number of employees involved in pulp operations (subcontractors, loggers, drivers, etc.) amounted to roughly 30 people. Worse, local news outlets erroneously reported that Lauzon would be shutting its operations by the end of November. Note: the sawmill operates under Lauzon Industries, but it doesn’t affect the flooring portion of the company’s business as the sawmill will remain in operation, Lauzon stated.
The confusion, according to Lauzon executives, arose out of a misunderstanding concerning Lauzon Hardwood Flooring’s recently announced plans to cease logging from government/public-owned sources as a result of the paper mill closing. “On Nov. 8 we announced that as of Nov. 28 we will stop harvesting logs from public/government land,” Lauzon explained. “Until they come back to us with a solution—we are going to increase our harvesting from our private lands as well as grow our purchases of logs on the open market. We cannot continue to accumulate pulp and not be able to sell it to anyone. It just doesn’t make sense financially.”
As a fully integrated manufacturer, Lauzon gets its logs from three sources: its own private forests; public/government lands (which represents a sizeable portion of its supply); as well as the open market. At present, roughly 30% of what Lauzon processes through its sawmills is purchased from the open market. “We have been increasing our purchases over the last two months because we were seeing this development coming,” Lauzon explained.
Heart of the matter
Fortress, the paper mill, blamed its closing on the ongoing trade dispute between the United States and China, as well as the weakening of China’s domestic demand for textiles and clothing. Canadian hardwood flooring producers agree, citing aggressive dumping actions on behalf of China.
“Due to the tariffs put in place by the U.S. government on Chinese product, the Chinese are turning around and dumping product into Canada at totally ridiculous prices, because we have close to zero barriers here for Chinese product,” Lauzon explained. “It’s sad in that sense because we’re seeing competition come in and undercut all the North American manufacturers. That’s not helping the industry as a whole.”
At the same time, China could be a potential market for Canadian suppliers, given the strong demand for Canadian hard maple in China. But there’s one small challenge: “The main problem is we have to pay a 22% fee when going into China,” Lauzon said. “It puts many of our mid to high-end products out of reach.”
While the company continues to lobby the Canadian government to work toward a solution on several fronts, it is moving ahead accordingly.
“As a company we are putting a lot of energy and focus into the U.S. market,” Lauzon told FCNews. “The potential is huge.”
In the short to medium term, Lauzon’s sawmill expects to produce less output for the next two months while it adjusts its sourcing strategies. But make no mistake, there are no plans to dramatically curtail operations on the flooring side of the business. “We don’t have any facilities closing down” Lauzon said.