Norbord announces reduced operating schedules26 March 2020
Norbord has announced that it will be reducing production across its North American OSB mills in response to the impact COVID-19 has had on demand.
The company will be reducing shifts and running alternating schedules at a number of its mills to deal with an anticipated reduction in OSB demand and to comply with government-imposed restrictions. This strategy will initially result in a 25% reduction to Norbord's operating North American mill capacity.
The company’s statement said: “The OSB demand situation is changing day-by-day, and the company's ability to continue to operate any of its mills could be influenced by factors outside Norbord's control, including government-imposed restrictions, therefore additional operating adjustments may be necessary. The company does not intend to provide further operational updates unless there is a significant change in this curtailment strategy.”
Norbord's European business is prepared to take similar action and will adjust mill operating schedules as needed to match production with demand.
In addition, the company is deferring non-critical capital projects and further reducing its 2020 capital expenditures budget by 25%, from US$100m to US$75m, to preserve cash and balance sheet flexibility.
"These are extraordinary times and difficult decisions, but they reflect the uncertainties facing businesses around the globe," said Peter Wijnbergen, president of Norbord. "Of utmost importance, our first priority remains the health and safety of our employees, and in response we have been implementing a number of measures across our operations to mitigate potential exposure to COVID-19. Further, we believe that reducing operating schedules across our mills gives us the best flexibility to adapt to the ever-changing demand landscape while still meeting our customers' needs, reducing hardship on our employees and ensuring we are prepared for a return to growth when markets normalize."