West Fraser Timber Company, a leading supplier of lumber and other wood products extensively used in the building and construction market, announced last week that it was acquiring Norbord, the leading global producer of oriented strand board (OSB) and a key supplier of engineered wood products, such as plywood. The transaction, which is expected to be completed in the first quarter of 2021, will create an integrated global wood building products manufacturer with annual sales of about US$6 billion.
This transaction will create a leading supplier of a full range of wood-based building materials. West Fraser is already a key player in the industry due to its leading position in the wood lumber, wood panels, and engineered wood products markets.
By acquiring Norbord, West Fraser adds to its extensive wood panel and engineered wood products manufacturing capacity, and, more importantly, expands its portfolio by adding Norbord’s OSB product lines. Thus, West Fraser can position itself as the leader supplier of nearly all of the wood products used in construction applications.
West Fraser will also benefit by becoming a global player in the wood products market. While West Fraser exclusively operates in the US and Canada, Norbord boasts a number of manufacturing centers in Europe, as well as a distribution network in Japan that serves the growing Asian market. These international operations will boost sales as the world recovers from the recession caused by the COVID-19 pandemic.
The combined company will be well-positioned to succeed as the economy recovers from the COVID-19 pandemic. Sales of lumber and other building materials have remained strong during the recession due to a surge in DIY projects.
Going forward, this activity will remain strong, while solid demand for housing will spur building activity and thus drive demand for the products West Fraser supplies – lumber, plywood, OSB used as sheathing, and roof and floor trusses.
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