May 29, 2009 / 8:47 PM / 9 years ago

UPDATE 1-West Fraser chops dividend in weak forestry market

* Cuts dividend to C$0.03/shr from C$0.14

* Says move will save about C$19 million a year

VANCOUVER, British Columbia, May 29 (Reuters) - West Fraser Timber Co (WFT.TO) slashed its quarterly dividend on Friday, citing weak lumber and pulp markets that it does not expect to improve this year.

North America’s largest softwood lumber producer cut its dividend to 3 Canadian cents a share from 14 Canadian cents. West Fraser said the reduction would save it about C$19 million ($17.4 million) a year and was part of its overall cost-cutting program.

West Fraser’s lumber sales have struggled following the collapse of the U.S. housing market, and its pulp operations have been hit hard by the global economic slowdown, which has devastated prices.

Those tough market conditions will persist through the rest of 2009, the company said. (Reporting Allan Dowd, editing by Rob Wilson)

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