The town of Iroquois Falls was happy to learn that Resolute Forest Products (the former AbitibiBowater) is investing $12 milllion to $17 million in the thermomechanical pulp mill.
“This is certainly good news for the town,” said Mayor Gilles Forget. “The fact that they decided to generate some funding into our facility means we are good for the long run.”
Resolute FP said the investment is in large part due to the collaboration with the employees of the mill and union representatives.
The Montreal-based forestry giant said the upgrades will improve the quality of the paper produced on Machine No. 8, as well as the current thermomechanical pulp line, with additional pulp cleaning.
“It's always our objective to have the lowest cost possible in every one of our mills,” said Pierre Choquette, director of public affairs Canada for Resolute FP. “The opportunity came up for us to better our productions at the mill, and of course eliminate inefficiencies that were part of the operation.”
Newsprint demand has been on a steady decline and many paper mills have become casualties.
With one of few operating pulp mills in Ontario, Forget said this announcement gives the town of 4,700 a breath of fresh air.
“Not to say I'm being pessimistic about the other mills,” he said, “but the reality is that newsprint demand in North America is going down while it's going up in Asia, so we will see more offshore shipping now.”
The investments made will improve the overall sheet quality in the mill, and make it more competitive going forward.
Choquette said that the investments will be made over the next 12 months.
“The delay for all those investments can take a few weeks to a few months,” said Choquette.
Although mostly good news, the investment does bring a bit of bad. The current wood handling chip production operation will be shut down, eliminating the wood room and wood yard during the first half of 2012.
The mill will then begin to to operate with 100 per cent externally supplied wood chips, but the result is the elimination of approximately 60 jobs.
“The reality is that our workforce is aging, so it's in the market reality we are facing right now,” said Choquette. “So if we can mediate on the impact of having people retiring instead of getting people laid off, then we will obviously work through that scenario.”
Overall, employment at the mill will be in the range of 250 on two machines, said Choquette.
It's a far contrast to the days when the mill used to employ more than 1,000 people at its peak.
“We are quite optimistic,” said Forget, “even though it means that they will be reducing some of the jobs in the mill through retirements.”
Choquette said as long as it's profitable to run two machines, the company will continue to do so, but the priority is to boost production on the large Machine No. 8.
“It's clear that we're doing our best efforts to better our production there,” said Choquette. “It's always a question of enhancing our production and lowering our cost, and we think this is the right way of doing it.”
