Boise Cascade joins the list of industry manufacturers and producers forced to temporarily curtail production. Last week, Weyerhaeuser, LP Building Solutions, and several Canadian producers with operations in the United States announced they were reducing capacity and volume in response to the ongoing health crisis.
Boise Cascade announced its wood products division will reduce the volume of plywood and engineered wood products it will produce in the coming weeks. The company is planning a 25% to 35% year-over-year (YOY) plywood product reduction and a 20% to 40% YOY engineered wood product production reduction depending on location. The reductions will be implemented through a combination of periodic curtailments and cutbacks in operating schedules at specific facilities. The company’s building materials division is also likely to experience reduced sales and earnings as a result of the coronavirus, according to a news release.
“We are operating from a strong financial position, but are taking necessary actions to reduce our production levels and costs in other parts of the company in response to what we expect to be a significant decline in market demand over the next several months,” CEO Nate Jorgensen said in a public statement. “We are firmly committed to serving our customers, while taking steps to protect the well-being of our associates.”
Boise Cascade negotiated an extension of its $350 million revolving credit agreement and the related $50 million term loan on March 13, 2020. As of March 31, the company had availability under its revolving credit agreement in excess of $340 million and no debt maturities prior to 2024. The company is reducing planned capital spending for 2020 to $50 million to $70 million from $85 million to $95 million.
Boise, Idaho-based Boise Cascade has also implemented several practices at its facilities to promote the health and safety of its associates. The company is encouraging associates to telecommute where possible and practice social distancing measures, requiring associates who feel unwell to self-quarantine, providing associates with emergency paid leave and other benefits to help cope with the coronavirus, restricting business travel and face-to-face meetings, increasing the frequency of cleaning at facilities, and implementing temporary policies for product pick-up and deliveries at locations to minimize physical contact.