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Weyerhaeuser to Close Lumber and Plywood Mill in Montana

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Forest product manufacturer and supplier Weyerhaeuser Company (WY - Free Report) recently announced its decision to permanently shut down its lumber and plywood mill in Columbia Falls, MT.

As revealed, this strategic move by Weyerhaeuser has been primarily triggered by the low capacity utilization of the mill in the wake of shortages of logs in the area. By closing the mill by August end or early September, the company hopes to better align the capacities of remaining mills, including lumber and plywood mills in Kalispell and a medium-density fiberboard mill in Columbia Falls, with the region’s logs supply.

In addition, Weyerhaeuser plans to add shifts to its Kalispell mills as well as move its Montana office to Seattle headquarters.

We believe such strategic decisions will enable Weyerhaeuser to boost its profitability in the quarters ahead. Earlier this month, the company signed a deal with Nippon Paper Industries Co., Ltd. to sell its liquid packaging board business for approximately $225 million while in May, it had agreed to sell its Cellulose Fibers pulp mills for approximately $2.2 billion cash to International Paper Company (IP - Free Report) . Such dispositions will enable the company concentrate on its core timber, land, and forest products business. However, the company is still working on finding a suitable alternative for its publishing papers joint venture facility.

Weyerhaeuser, with a market capitalization of $21.4 billion, currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the building products industry include Louisiana-Pacific Corp. (LPX - Free Report) and Universal Forest Products Inc. (UFPI - Free Report) , both carrying a Zacks Rank #2 (Buy).

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