Kitwanga Lumber Co. Ltd. announced this afternoon that it has filed for bankruptcy protection. The action comes after efforts this fall to seek new niche markets for the specialty wood products mill proved unsuccessful, says a release from the company.
The outlook for 2012 is not expected to improve, the release continued.
The company re-opened its mill at Kitwanga in June with Premier Christy Clark at the official ceremony as lumber markets and prices looked stable and were expected to stay consistent through the remainder of the year and beyond.
Continuing global economic uncertainty throughout the summer led to a decreased demand for lumber and decreased prices, the release continued.
The sawmill soon became unprofitable and was temporarily shut down in October.
Kitwanga Lumber Company is a subsidiary of Pacific BioEnergy Corporation which had bought the company out of bankruptcy two years ago as part of a strategic move it hoped would lead to the construction of a wood pellet plant in Kitwanga.
Pacific BioEnergy still believes there is a bright future for the northwest BC bioenergy industry, the company press release concluded.