Millar Western to rebuild Fox Creek sawmill

EDMONTON, June 18 /CNW/ - Millar Western Forest Products Ltd. today announced plans to build a new, advanced-technology sawmill on the Fox Creek, Alberta, site of a company sawmill lost to fire nearly two years ago.

Construction of the new sawmill will commence this month, with completion and commissioning slated for the third quarter of 2011 and full startup anticipated by the end of that year. Built at an estimated cost of $45.8 million, the new mill will have a design capacity of 117 million board feet of lumber per year, and will employ approximately 55 people full-time, working on a single-shift basis. The project will be financed from company cash flows, including proceeds received from insurance on the fire loss, the outstanding balance of which amounts to $7.6 million.

The full project scope will include construction of a new sawmill, upgrades to the site's existing planer mill, installation of dry kilns, and site improvements to enhance log storage and handling and fire suppression capability. The sawmill design will incorporate two primary breakdown lines, one for large logs and one for small logs, to provide for efficient processing of the operation's timber supply. The mill will employ state-of-the-art technology to achieve optimal lumber recovery and will accommodate the production of a range of specialty wood products, in addition to dimension lumber.

Millar Western purchased the Fox Creek lumber complex in August 2007. On August 29, 2008, an electrical fire broke out while the sawmill was in operation, causing extensive damage to the mill building and equipment, while sparing the planer mill, log yard and other site facilities. Since shortly after the 2008 fire, the Fox Creek operation has been shut down, as the company monitored market conditions and considered its options. Most mill employees were offered employment at other Millar Western sites, or were successful in finding work elsewhere.

The new sawmill will be one of four forest products manufacturing operations owned and operated by Millar Western, a privately held company producing dimension lumber and high-yield pulp at facilities in Whitecourt and Boyle, Alberta, in addition to Fox Creek. Millar Western's mill operations are supplied with timber harvested on the basis of independently certified, sustainable forest management practices.

SOURCE MILLAR WESTERN FOREST PRODUCTS LTD.

For further information: For further information: Janet Millar, Communications Director, 780-486-8249, jmillar@millarwestern.com

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MILLAR WESTERN FOREST PRODUCTS LTD.

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