Despite a flurry of pre-election announcements that paved the way for a new value-added operation in Atikokan, pieces of the plan began unraveling when the local particleboard mill filed for creditor protection October 10. 
While it seemed that events couldn’t get much worse for FibraTECH, 140 workers shut down the plant and walked off the job after hearing that they wouldn’t be paid for their last three weeks of work. But owner Dan Warren says there is still hope.
“We’re hoping to put together a re-organization package to get us going again. Our customers are working with us and are being patient.”
How did it all go so wrong within two months of two provincial funding announcements that made it possible open a laminated veneer (LVL) plant and co-generating station, with cost-saving synergies for FibraTECH?
“We have been struggling with the same things all the other forest industries are struggling with: the dollar, high energy costs, (and a sluggish United States housing market),” said Warren, also president of Superior Laminated Lumber Corp.’s proposed LVL mill. “We’ve tried everything we can to mitigate it. We put in a new burner, we cut our gas costs by 95 per cent, and we cut our power costs by 37 per cent.”
Even $6 million in provincial supporthas failed to offset the company's difficulty with the strong Canadian dollar.
On top of that, FibraTECH and Thunder Bay-based Delta Energy Co. were unable to reach an agreement on the terms of a power arrangement for a 10-megawatt co-generation station.
Days before shutting down, FibraTECH attempted to secure loans from credit unions through FedNor assistance, then accrue $1 million in additional loans from two other credit unions to keep operating until December. To achieve the necessary funding, it had also managed to secure an agreement with the municipality to convert $750,000 of its $1.3 million property tax bill to a township investment in the facility though not without heated council discussion and strong opposition from township staff. By December, FibraTECH hoped to have a business plan and a separate power deal to attract funding to build its own co-generating station.
However, the credit unions and FedNor decided against backing two more months of operation.
It is too soon to count FibraTECH out since the company is drafting a business plan for a co-generating station and still hopes to get approval for a power deal that could help secure funding.
As well, the LVL mill (made possible through a birch allocation approved by the MNR in August) still has investor interest, although a co-generating plant “makes that more attractive,” said Warren.
Cost-saving synergies, and an increased focus on value-added production will be key to a comeback for FibraTECH.
“We’ve focused our market on value-added products and they are still profitable to make even with the [high] dollar—if we can mitigate the high energy costs.”
