This Annual Information Form of West Fraser Timber Co. Ltd. ("West Fraser", "we", "us", "our" or the "Company") is dated as of February 16, 2017. Except as otherwise indicated, the information contained in it is as of December 31, 2016.
Forward-looking StatementsThis Annual Information Form, and the Annual Report of which it forms a part, contain historical information, descriptions of current circumstances and statements about potential future developments. The latter, which are forward-looking statements, are presented to provide reasonable guidance to the reader but their accuracy depends on a number of assumptions and is subject to various risks and uncertainties. Forward-looking statements are included under the headings "Fibre Supply - Mountain Pine Beetle (the projected outcome of the infestation) and Aboriginal Matters (the potential effect of aboriginal title or rights)" and "Capital Structure - Cash dividends" and "Risks and Uncertainties" in the 2016 Management's Discussion & Analysis incorporated herein. Actual outcomes and results will depend on a number of factors that could affect the ability of the Company to execute its business plans, including the matters described in these sections and under "Risk Factors", and may differ materially from those anticipated or projected. Accordingly, readers should exercise caution in relying upon
forward-looking statements which reflect management's estimates, projections and views only as of the date hereof. The Company undertakes no obligation to publicly revise these statements to reflect subsequent events or changes in circumstances except as required by applicable securities laws.
Business OverviewWe are a North American diversified wood products company which produces lumber (SPF and SYP), panels (plywood, MDF and LVL), pulp (NBSK and BCTMP), newsprint, wood chips and energy. We hold rights to timber resources that are sufficient to supply a significant amount of the fibre required by our Canadian operations and have long-term agreements for the supply of a considerable amount of the fibre required by our United States operations. We carry on our operations through subsidiaries and joint operations in British Columbia, Alberta and the southern United States. Our operations located in western Canada manufacture all of the products described above except SYP lumber. Our sawmills located in the southern U.S. produce SYP lumber and wood chips.
The annual production capacities of our wholly-owned facilities and our share of the capacities of our 50%-owned operations are as follows:
Lumber (MMfbm) | |
SPF | 4,100 |
SYP | 2,400 |
Total | 6,500 |
- 2 -
Panels | |
Plywood (MMsf 3/8") | 850 |
MDF (MMsf 3/4") | 250 |
LVL (Mcf) | 3,200 |
Pulp (Mtonnes) | |
BCTMP | 680 |
NBSK | 570 |
Newsprint (Mtonnes) | 135 |
Our goal at West Fraser is to generate strong financial results through the business cycle, relying on our committed work force, the quality of our assets and our well-established corporate culture. This culture emphasizes cost control in all aspects of the business and internal and external competitiveness. In our approach to employee relations, we emphasize employee involvement and favour internal promotions whenever possible.
We are a diversified producer of wood products with access to extensive timber resources. Our Canadian lumber, plywood, LVL and veneer operations are directly or indirectly the primary source of raw material for our pulp & paper and MDF operations.
Acquisitions and expansions are considered with a view to extending our existing business lines, particularly in lumber operations, and to product and geographic diversification. Our earnings over the business cycle have enabled us to make significant and ongoing capital investments in our facilities with the goal of achieving, maintaining or improving an overall low-cost position.
We are committed to operating in a financially conservative and prudent manner. The North American wood products industry is cyclical and periodically faces very difficult market conditions and serious challenges. During such cyclical downturns, we focus on financial discipline, including reduction or deferral of non-essential capital expenditures. As market conditions improve we will typically undertake an expanded capital investment program in order to catch up on expenditures reduced or deferred during the downturn. We believe that maintaining a strong balance sheet provides the ability to react to growth opportunities and is a key tool in managing our operations through a business cycle.
Corporate StructureThe chart on page 3 shows the relationship of West Fraser to the principal direct and indirect subsidiaries and the joint operations in which we participate and, where less than 100%, the percentage of our direct or indirect ownership.
West Fraser Timber Co. Ltd. published this content on 16 February 2017 and is solely responsible for the information contained herein.
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