Resolute to shut down Bowater paper mill in Nova Scotia

Resolute Forest Products says a struggling paper mill on Nova Scotia's south shore will be closed indefinitely.

The company announced Friday that the Bowater Mersey facility in Brooklyn will be idled starting on Sunday because it is unable to compete as prices decline in export markets.

About 320 workers at the mill and associated woodlands will be affected by the indefinite shut down In December, Premier Darrell Dexter announced a $25-million forgivable loan to the firm in $5-million yearly portions. On Thursday, he said that money to the to keep the mill's two paper machines operating and to help the company make efficiency improvements and upgrade a power plant hasn't been spent yet.

The company says about 320 workers at the mill and associated woodlands will be affected by the indefinite shut down.

A sawmill owned by the company at nearby Oakill and the Brooklyn Power Corp. are also affected by the shut down.

The company said it is looking at the feasibility of selling all of its assets in Nova Scotia, including the paper mill, sawmill and Brooklyn Power.

Company spokesman Seth Kursman acknowledged that workers made sacrifices to try and save the mill as they agreed to wage concessions as the province offered financial assistance.

"Everything that was really in the direct control of the people here, of government, of stakeholders across the board, people did, they stepped up and it makes the situation that much more frustrating," he said in an interview.

The plant was initially scheduled to shut down Sunday for about two weeks. It was also idled last month, the latest in a series of scheduled down times for the mill since December.

Late last year, unionized workers at the mill voted to cut 110 jobs in an effort to reduce labour costs and help save the operation.

Dexter said a continued erosion of the pulp and paper market is not helping the forestry sector, which is being flooded by cheaper products from European mills.

Don MacKenzie of the Communications, Energy and Paperworkers Union of Canada said the indefinite closure is a blow to the area, which has relied heavily on jobs at the mill during its more than 70 years of operation.

"It's just got to be devastating to the members I represent, to the community," he said. "It's a sad day for the people of Liverpool and it will obviously have an impact to many spin-off jobs in the province, and it's simply another reflection of the turbulent times in the pulp and paper industry."

The lifeline thrown to the company in December by the province was valued at a total of $50-million. In addition to the $25-million forgivable loan, the province also spent $23.75-million to buy about

10,120 hectares of woodland from the company.

Another $1.5-million was offered over three years to train workers. So far, $605,000 has been spent on training to improve safety, efficiency and production, said a spokeswoman with the Department of Economic Development.

Dexter defended the deal on Thursday, saying he wasn't prepared to give up on the plant.

"What would you do? You're going to walk away from the jobs of thousands of people? I think that would just be wrong," he said.

The Herald News

Friday, June 15, 2012

Mill workers in northern N.S. feel for 'brothers and sisters in Liverpool'

Workers at pulp and paper mills in northern Nova Scotia woke Friday to learn that swallowing deep cuts to pay and benefits doesn't necessarily secure their jobs.

Workers at the idle NewPage Port Hawkesbury plant in Point Tupper voted recently to accept cuts to their wages and benefits, the wind up of their pension plan and the loss of some 200 jobs.

On Tuesday, workers at Northern Pulp Nova Scotia Corp. in Abercrombie Point narrowly voted to accept significant wage and benefit rollbacks to keep their 45-year-old mill open.

Bowater Mersey workers also accepted similar cuts to keep the Brooklyn mill operating only to hear Friday that it will be closed soon.

"They took the hair cuts, accepted the significant changes to work practices, wages and benefits in hope of securing their futures," said Don MacLean, who took part in all three negotiations as national representative for the Communication, Energy and Paperworkers Union.

"At the end of the day, the labour costs are not the item that would, alone, determine whether a plant continues to run. There are external factors, internal management, the condition of equipment, total manufacturing costs. These are the things that ultimately determine the longevity of a mill."

The NewPage mill, one of the newest and fastest in North America, produces a high gloss supercalendered paper that sells into a different market than the newsprint produced in by Bowater Mersey.

The Point Tupper mill has been idled since former owner NewPage Port Hawkesbury Corp. filed for creditor protection last fall. Pacific West Commercial Corp. is in the process of negotiating access to wood fibre with the province and electricity rates with Nova Scotia Power, before potentially buying the mill.

Pacific West has said it hopes to have the purchase agreement approved by the Nova Scotia Utility and Review Board by August with the intention of producing paper by sometime in September.

But demand for the product produced in Point Tupper is down 17 per cent over the same time last year.

"So you've got a market down 17 per cent, plus the expectation of a mill with significant capacity starting up in fall," said Paul Quinn, paper and forest products analyst for RBC Capital Markets.

"It'll force another mill to close. But that mill won't be in the Maritimes, it'll probably be in Quebec."

Former operator NewPage had high production costs, paying more than $100 million annually in power bills. It also had difficulty accessing the fibre need to supply its two paper machines and huge debt payments resulting from purchasing the Point Tupper facility from Stora Enso North America.

Pacific West "is buying that mill for next to nothing, he's getting a labor deal, a fiber deal and a power deal," said Quinn.

A spokesman for Pacific West told The Chronicle Herald this spring that the Point Tupper plant would be operated as a separate company from the parent firm, with a "minimal initial debt" based upon the plant's purchase price.

The market for the product made at the Northern Pulp mill has the potential to grow in the future, Quinn said.

While prices are low now, demand for the softwood kraft pulp used in making tissue paper and specialty applications is growing about two per cent annually, he said. In addition, no new capacity to make the product is bein added because of a lack of access to the softwood grown in northern forests.

"So if they can keep their costs down, there is a good medium- to long-term outlook for kraft pulp mills," Quinn said.

Steve MacDougall said former NewPage workers remain confident that there is a future for their mill, if a deal is secured with Pacific West.

"We have probably the best paper machine in North America, if not the world," said the recording secretary for Communication, Energy and Paperworkers Union Local 972.

"So if any mill survives in North America, we believe it will be ours.

But as a small community reliant on a major employer, we sympathize and feel for our brothers and sisters" in the Liverpool area.