Rail Industry News
April 2000

CANFOR And BCRail Announce $8.2 Million Chip Handling System for Prince George Mill

Prince George, BC, April 25, 2000, from BCRail website - Canfor Corporation (CFP: TSE) announced today the opening of a new chip handling facility at its Prince George Pulp and Paper Mill. The $8.2 million project, partially funded by BC Rail, is expected to increase chip-handling capacity at the mill by over 50% to approximately 6,000 tonnes per day.

"The new chip handling system at our Prince George Pulp and Paper Mill is part of Canfor's strategy to invest in high-return strategic capital projects at our mills", said David Emerson, President and CEO of Canfor. "This unique capital investment targets what is typically a high-cost component of a mill and will save Canfor $2.5 million per year in operating costs regardless of market fluctuations."

BC Rail contributed $3.5 million to the project, a high capacity chip dumper and conveyor belt system, as part of a six-year transportation agreement with Canfor. “BC Rail is always looking for ways to enhance and grow our business", said Paul McElligott, President and CEO of the BCR Group of Companies. "This project and subsequent transportation agreement with Canfor represents an ideal opportunity to reduce costs by improving our productivity in this highly competitive market and build on an integrated transportation package for a very significant forest products customer."

By creating an efficient rail car unloading system at the Prince George Pulp and Paper Mill, Canfor will now be able to divert rail cars from its other two pulp mills and re-direct the truck traffic to the other mills which aren't as efficient in unloading railcars. BC Rail, on the other hand, will benefit from increased wood chip business and faster railcar cycles. "The project is a win-win", said Ray Smith, General Manager Specialty Pulp and Paper for Canfor. "The benefits of this project for both companies made sharing the capital costs possible."

The agreement between Canfor and BC Rail is for a six-year term and was contingent upon Canfor agreeing to a new transportation plan and schedule to improve railcar handling. The agreement can be renewed with the approval of both parties.

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