To cope with a 19.8 per cent softwood countervailing tariff and an anti-dumping duty, Sigurdson Forest Products Ltd. in Williams Lake will have to tighten its belt, said owner Brian Sigurdson.
“We will have to watch our numbers very closely.”
“We have a 70 per cent U.S. market overall,” Sigurdson told the Tribune Wednesday. “It’s a big volume. Texas is the hot spot for us – all our finger joint goes there. Other than that it can pretty well go anywhere in the U.S.”
The company has 120 people directly on payroll, plus 50 loggers, 50 truckers and other spin offs, he added.
During the last softwood lumber dispute, there was an option for companies with unique circumstances to apply for exclusion. This option has, up to this point, been denied by the U.S. Department of Commerce.
Sigurdson does not have a forest license and pays stumpage rates ranging anywhere from $1.25 to $20 per cubic metre depending on the quality of the timber.
This time around the U.S. is saying “no exclusions,” Sigurdson said, adding he hopes they will have the opportunity to go under examination by the U.S. Commerce Department and point out their company is different than companies like West Fraser or Canfor who have Forest Licences that go on forever.
“We bid on 100 per cent of our wood competitively and are paying full market value for our logs,” he said. “We are hoping the U.S. will give us a rate based on our numbers, but we cannot even make our case until after January 2018 when the final determination is published.”
Sigurdson also said the company should not have to pay anti-dumping duty because during the grace period from October and June 2016, they shipped seven percent less volume than they did between January and September 2015.
“We are small enough that we cannot pile up our lumber for months and months and hope to hit a good market,” he said. We sell our production each month and follow the markets. The sales may be to the U.S., China or Canada”
Chief Operating Officer Nathaniel Sigurdson said for the anti-dumping duty, Sigurdson is being lumped in with companies that have surged their exports.
“They are going to come along here in the next weeks and demand payment of 20 per cent going back 90 days and for us that’s going to be $1.5 million,” Nathaniel pointed out. “Bigger companies will be exempt because they proved they weren’t surging. We could prove it too but haven’t been given the opportunity.”
If U.S. President Donald Trump signs an executive order to break from the NAFTA, Sigurdson said it would still have to go to Congress so he is not too concerned.
“The only thing that has me worried is when there is talk of NAFTA going away. I think we have a certain amount of guarantee under NAFTA because it allows us an appeal process where we have to be listened to.”
In the end it will be the American consumers who will “take it on the chin,” Sigurdson said.
“We’ve heard it will add a cost of $1,200 to $2,000 to the average new home being built.”