October 28, 2009 / 10:02 PM / in 8 years

UPDATE 1-West Fraser to close British Columbia plant, cut jobs

* Says to close Eurocan paper mill in Kitimat

* To cut 535 jobs

* Says Eurocan operation unprofitable

* To record C$138 mln impairment charge in Q3

Oct 28 (Reuters) - Softwood lumber producer West Fraser Timber Co Ltd (WFT.TO) said it will permanently close the unprofitable Eurocan paper mill in British Columbia and cut 535 jobs.

Since December of 2008 Eurocan, in Kitimat, has experienced a drop of about 40 per cent in the net selling price of its products, West Fraser said in a statement.

West Fraser -- which has lumber mills in Western Canada and the southern United States, as well as pulp and paper operations in Canada -- said it will record an asset impairment charge of C$138 million ($129.7 million) in the third quarter related to the property plant and equipment and certain other assets at the Kitimat facility.

In addition, West Fraser will incur costs totaling over C$70 million over the next several quarters related to the shutdown of the facility.

West Fraser shares, which have gained more than 10 percent in the past month, closed Wednesday at C$27.51 on the Toronto Stock Exchange. ($1=1.064 Canadian Dollar) (Reporting by Krishna Chaithanya in Bangalore; Editing by Unnikrishnan Nair)

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