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Co-gen a no-go for Interfor

International Forest Products Ltd. (Interfor) will not be proceeding with its plan to develop a co-generation plant in Grand Forks after they received news that their bid to B.C. Hydro was unsuccessful. 

On August 2nd, Interfor announced that its proposal under Hydro’s Phase 2 Power Call to construct a 20 MW power plant at Grand Forks failed.
 
They went on to say that they are continuing to review options to upgrade the Grand Forks sawmill and a decision is expected later this year. In the meantime, some upgrades have been put on hold in light of current market conditions.
 
In their quarterly report, Interfor showed a net loss of $2.9 million or $0.05 per share compared to a net loss of $0.5 million or $0.01 per share in the immediately preceding quarter and a loss of $0.6 million or $0.01 per share in the second quarter of 2010.
 
Lumber production in the second quarter was 325 million board feet, down 7 million board feet versus the first quarter as log availability affected operating rates at a number of the Company’s mills in the quarter. Sales volumes, including wholesale activities, increased 21 million board feet to 324 million board feet versus 313 million board feet in the first quarter.
 
Sales to China increased to 39% of the Company’s non-wholesale shipments versus 28% in the first quarter as shipping capacity was added to address the issues which impacted shipments in the first quarter.
 
The report outlines that business conditions remain uncertain. Sovereign debt issues in Europe and the United States continue to impact financial markets and the value of the Canadian dollar while conditions in the United States housing market remain stagnant.
 
Offshore activity levels remain strong although the impact of tighter credit conditions in China will need to be monitored going forward. Log 2 prices in the U.S. Pacific Northwest have dropped in recent weeks, as pressure from offshore markets has lessened. Log costs in the B.C. Interior will benefit from increased activity levels over the balance of the year.