Ignace may regain its moniker as a forestry town with AbitibiBowater poised to reopen a shuttered sawmill.
That's good news for Joanne Ratthe, president of Elk Construction, who's hopeful better times are ahead for the northwestern Ontario township of 1,400.
“We're really hoping we have the opportunity to bid on some work for them.”
The company once held a yard equipment contract at the sawmill until the Montreal forestry giant decided to close the two-year-old mill in late 2006, citing poor market conditions and an insufficient quota allocation stemming from the Canada-U.S. softwood agreement. Forty-nine staff and contractors were affected.
The company suddenly announced in late August it was investing $32 million over the next two years to upgrade the idled stud mill with plans to resume production by either late 2013 or early 2014.
Ratthe's contracting firm — started 25 years ago by her father, Lee Kennard, Ignace's mayor — is the town's largest private employer at just under 50 people. They've survived through years of stagnant conditions with snowplowing contracts into the mill site, and now highway maintenance work with the Ministry of Transportation.
Ratthe says the news will certainly reverse the exodus of skilled labour from the area.
“Hopefuly it'll increase the number of people in town. That'll be a bonus.”
Many breadwinners left the community for jobs in Western Canada. The lure of mill jobs should bring them back.
“Most of the people (who have left), their homes, wives and children are here. They've just gone to do what they had to do. It's going to bring a lot of people home.”
The investment is part of AbitibiBowater's larger $100-million capital spending program in Northern Ontario. Earlier in August, the company announced it was spending between $12 million and $17 million to upgrade machinery at its paper mill in Iroquois Falls in northeastern Ontario.
“The company is very excited about this announcement,” said Rick Groves, AbitibiBowater's Thunder Bay-based forestry manager for Ontario. “The message is we're back, we're here for a while and we're looking for people to come work.”
Though the U.S. housing market continues to struggle, the company believes it's got to pick up at some point.
“Everyone's always been optimistic that the markets are going to come back, it's just a matter of when,” said Groves. “We think coming onstream will be beneficial.”
About 90 mill jobs will be created for two shifts, with an estimated 80 outside jobs in harvesting operations and transportation.
A new collective agreement was being hammered out with the United Steelworkers union.
The company plans to add an energy system and kilns to dry lumber and a planer and packaging system for the production of finished lumber ready for the market. Shavings from the planer will be used to heat the kilns and buildings.
Groves said some final engineering must be done before the company gets into equipment selection and selects a contractor for the modernization effort early next year.
“Ignace will see the construction jobs next summer.”
Production capacity for the mill will be 100 million board feet.
Groves said depending on the North American market does, “we'd like to run it at full speed as soon as we can. Our expectations are that the market will return in 2014 and we'll have already ramped up (AbitibiBowater's) sawmill in Thunder Bay at 300,000 million (board feet).”
The company said Ignace is strategically placed with its wood supply, proximity to both the Canadian and American markets, with transportation links by road and rail.
The mill and saw lines are relatively new, having only started production in 2004.
Despite being shut down for five years, Groves said the facility remains in good shape. Extra effort was made to maintain security and minimize any damage.
The biggest challenge may be finding enough skilled labour, particularly millwrights and electricians, and get them to settle in Ignace, 250 kilometres northwest of Thunder Bay.
On the export front, Canadian and U.S. trade officials began discussing a two-year extension to the 2006 softwood lumber agreement in July. The deal is set to expire in October 2013. Though Groves acknowledges the outcome of those talks does create some uncertainty, the capital spending was done as part of an overall business strategy.
“Lumber is a key component of our business,” said Groves. “Ignace helps us integrate and make effective our overall wood supply in relation to other AbitibiBowater mills in Thunder Bay and Fort Francis.”
With fibre awarded through the province's Crown competition, the company is reconfiguring its wood supply to make better use of it and keep costs low.
“There are some obvious synergies to convert wood part-way up the supply chain and put the right chips in the right mill (which) allows a whole series of managing inventories associated with it.”