Canfor Corporation reported that its 70%-owned subsidiary, Vida Group, has entered into an agreement to purchase three sawmills in Sweden.
Vida Group, also based in Sweden, is purchasing the mills from Bergs Timber for 43 million Canadian dollars (US$31.8 million) along with working capital.
“We are excited that Vida’s strong performance and balance sheet has enabled them to grow their operating footprint in Sweden,” said Don Kayne, president and CEO of Canfor.
The three mills, which are located in Vimmerby, Mörlunda and Orrefors, Sweden, will add approximately 215 million board feet to Vida’s annual capacity. With additional investment, Vida anticipates the production capacity of the mills can be increased to 300 million board feet.
After taking into account this additional production capacity, Sweden represents 22% of Canfor’s globally diversified operating platforms, plus 43% in British Columbia, 31% in the Southern United States, and 4% in Alberta.
The transaction is expected to close in the third quarter of 2020, Canfor said.
Canfor acquired 70% of Vida Group in 2019 for about US$440 million. Vida has an annual production capacity of 1.1. billion board feet per year.
Following downtime related to the impacts of the COVID-19 pandemic, Vida is now operating at full capacity and Canfor continues to employ variable operating schedules in North America with sawmills in the United States operating at almost full capacity and Canadian sawmills operating at approximately 90% effective June 18, the company said.
Based in Vancouver, British Columbia, Canfor has approximately 7 billion board feet of lumber production capacity across all facilities.