Dec 19, 2005. /Lesprom Network/. Canfor Corp., Western Forest Products Inc. and Oji Paper Co. Ltd. will restructure Canadian pulp operations in a deal that closes a mill and transfers a historic timber harvesting operation. Western Forest's Squamish, British Columbia, pulp mill will be shut down, cutting 323 jobs, with the company agreeing to sell wood chips from its coastal sawmills to Howe Sound Pulp and Paper near Squamish, which is owned by Canfor and Japan's Oji. Canfor and Oji will create a partnership to buy Canfor's Englewood division, a timber harvesting operation and railroad on northern Vancouver Island. The assets and 275 workers will then be transferred to Western Forest in return for a wood chip supply agreement. Canfor and Oji will pay Western Forest $35-million to help close the Squamish mill, and Western Forest will pay $10-million for upgrades to the Howe Sound facility. Oji will pay $45-million in cash to create the partnership buying Englewood. Western Forest said it expects to take an $80-million restructuring charge and a $46-million asset writedown in the fourth quarter because of the mill closing. The deal announced late Thursday marks the latest consolidation of the timber industry in British Columbia's coastal region that last month saw Western Forest buy Cascadia Forest Products Ltd. Chief executive officer Reynold Hert said Western Forest's pulp operations had been unprofitable for several years and the 275 000 tonne-per year Squamish mill was too small and costly to operate because of outdated equipment. Canfor had also warned this year that it needed to restructure the Howe Sound joint operation that has struggled with high chip costs and debt load. “This [deal] is a crucial step in bringing the Howe Sound operation back to financial health as we continue to reduce costs at the operation,” Canfor CEO Jim Shepherd said. Canfor said a plan to restructure Howe Sound's long-term debt will be completed early next year. The Englewood division includes 945 000 cubic metres of harvesting rights, 4 725 hectares of private forest land and more than 100 kilometers of track used for one of the last logging railroads in North America.