West Fraser Timber Co. Ltd. (NYSE:WFG) Q3 2023 Earnings Call Transcript

Ray Ferris: Thank you, Sean.

Sean Steuart: Thank you, Sean.

Operator: Thank you. Your next question is from Ketan Mamtora from BMO Capital Markets. Please ask your question. Hello Ketan, your line is now open. It seems that Ketan has disconnected. We’ll just take the next question. It’s from Paul Quinn from RBC Capital Markets. Please ask your question.

Paul Quinn: Yes. Thanks so much. Good morning, guys. Just to start with Allendale, I know you started that mill up in June. Just what’s the run rate at the end of the Q3? Or how do you see that progressing? And what is it qualified to sell?

Ray Ferris: Well, good morning, Paul. And – yeah, good morning, Paul. So look, we’re quite pleased with the start-up so far as you might understand, it’s pretty early in the ramp-up curve, which I think we’ve said kind of two or three years. I don’t know if we’ve given what the actual guidance was for this year. And so – but I would say, historically you look back and you look at the OSB ramp up curves we’re very close or on plane with where we want to be and happy with the startup so far, actually. And – but I think what we’ve said is, it wouldn’t be significant this year. And I guess I don’t mean to be flippant, but I guess we’re going to have to stay tuned to see how worldwide goes next year.

Paul Quinn: Okay. And then just noticing that you’ve got now almost U.S. $825 million on deposit hearing from some of your competitors that there’s been some chatter on that file, the softer lumber. What is your take on the current situation and how do we get to resolution?

Ray Ferris: Well, I would say, it remains certainly a frustration for the industry and for West Fraser, I think, I mean, obviously we’re on both sides of the border. We certainly do not agree with the duties. And I think that’s well documented. Paul, look, you will see chatter in the paper from time to time with industry trying to work together to develop some thoughts about how to overcome the impasse. But I can also say there’s – there really isn’t anything going on other than people talking about what could be done or what might be done and should things improve. But today the governments aren’t talking and there’s really no discussion between the U.S. and Canada. But look, we’re – we continue to want to see resolution to the duties and we’re going to look for those catalysts to try and do that for what impact West Fraser has on those decisions.

Paul Quinn: Okay. And just in the past, that sort of the legal route, whether it was through NAFTA, WTO used to really sort of spur on those discussions. Where are we at in those two legal paths?

Ray Ferris: First, Paul, I would say I’m quite involved, and I can actually tell you that as involved I am, as I’m confused about if I tried to describe the legal status of all the different things that were going on between CBD and anti-dumping. I’m sure I would get it wrong. And I mean, I think it’s out there in the public domain, and so I just don’t want to try and trip something up. I think you saw that there was a couple of recent announcements around decisions being remanded back to the Department of Commerce, but again, those immediately go on appeal and away we go again. So I would say despite the fact that you’ll see and read things in the media and there’s – there are some decisions being made, I don’t think from a West Fraser point of view, it’s fundamentally changed.

Materially where we’re at is that we’re this hasn’t moved us closer to a resolution at this standpoint. So from our perspective, it looks like this is a ways away before resolution.