South Arkansas’ economy has taken a hit today with the announcement that El Dorado’s saw mill is closing down operations indefinitely. More than ninety jobs will be affected by the closure.
Conifex Timber is closing its El Dorado in what it refers to as an “indefinite curtailment.” According to Sandy Ferguson, Conifex Vice President for Corporate Affairs and Business Development, the company employs 98 individuals at the El Dorado site, and of that total, 92 jobs will be impacted by the closure. Six individuals will remain on during the interim period.
“We have six that will continue. There are a couple of them will be at the site… and the balance will help support our other mill in Glenwood, Arkansas or in Cross City, Florida at the corporate level,” she says.
The Glenwood facility is currently fully staffed, according to Ferguson.
Ferguson attributes soft lumber prices as the primary cause that led to the mill’s closure. “Lumber prices have been very low over an extended period of time – over a year now.
Lumber prices have dropped precipitously on the futures market. According to Nasdq.com, lumber prices have plummeted from nearly $650 in 2018 to roughly $348 in August 2019.
In addition, she says that Conifex is currently unable to invest further in the El Dorado sawmill, which it intends to revamp into a modern facility. While it completed phase I of the project, she says it does not have the capital for the second phase.
“We had the available capital to do phase one of that work and had hoped through our positive cash flow share, then [we could finish it],” she said. “Unfortunately due to difficult number market and the low prices, we weren’t able to do that work.”
The curtailment is expected to be phased out over two months, starting with the sawmill itself. It will be followed by the planar area and finishing section. The kiln area and drying process will then be affected.
“It will basically follow how the lumber is milled,” she says.
Conifex’s CEO and chair Ken Shields released a statement earlier about the mill’s closure.
“We regret this difficult decision, however lumber prices are simply too modest to justify continued operations at a site that requires further capital expenditures to realize its potential as an efficient, modern mill,” Shields said. “While our wish is to restart the mill as soon we can, our immediate priorities are to identity the scope of a Phase 2 capital investment to help better inform a re-start date,” Mr. Shields added.