TimberWest Forest Corporation is to pay out C$15m to terminate its log supply agreement with Western Forest Products.
The agreement involved TimberWest supplying up to 330,000m3 of saw logs at Vancouver log market prices.
Western Forest Products, which will add the C$15m payment to its working capital reserve funds, said the 1997 agreement had made good sense for the company when Crown land timber supply was fully allocated.
But a new system designed to make wood supply more open and market-based has given the company more flexibility to source additional specific log types.
