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Ruling ray of hope for Mackenzie |
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Written by By Brenda Bouw
THE CANADIAN PRESS
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Friday, 18 July 2008 |
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GRAND FORKSUNITED STATESFORESTS MINISTER PAT BELLCANFOR CORPRICK BERRY
VANCOUVER - Workers at the Mackenzie pulp mill in northern B.C. gained renewed hope Friday that a buyer can come along this summer and buy their shut-down operation.
B.C. Supreme Court Chief Justice Donald Brenner extended a stay that gives potential buyers of the mill until Sept. 2 to make a bid and restart the business.
A receiver has been put in charge of finding a buyer for the operation, formerly run by bankrupt U.S. forestry company Pope & Talbot Inc.
Friday's ruling came alongside the dismissal of an application by Canfor Corp., one of Canada's biggest lumber producers, to have its wood chip supply agreement with the mill cancelled.
The court heard Friday that the chip agreement is crucial to the mill's operations and a buyer would have been much more difficult to find without it.
“Hopefully someone will step up to the plate now and buy us,” said Carl Bernasky, president of the Communications, Energy and Paperworkers Union local 1092, which represents workers at the Mackenzie mill.
Bernasky said he has heard of three potential buyers for the mill, each one, as he understands it, would continue to run it as a pulp operation.
However, his concern is that the delay caused by the Canfor contract dispute before the court may have caused potential bidders to back away.
“What bothers me is how a company like Canfor can hold a town hostage like that,” Bernasky said.
Forests Minister Pat Bell said he was encouraged by the court decision, saying it should offer some security to bidders. He said he expects PricewaterhouseCoopers will make a concerted effort to sell the pulp mill. "I'd like to see this pulp mill back up and running," said Bell, whose riding includes Mackenzie.
Veteran pulp mill worker Rick Berry was more cautious about the court decision, saying he didn't see how it changed the uncertainty around the wood fibre agreement with Canfor. It will also be another six weeks before there's a decision, noted Berry. "This is not good."
Canfor had argued in court that its contract was breached after Pope & Talbot's Mackenzie mill was idled in early May, and it stopped taking chips. The court dismissed that application, without making judgment on whether or not the contract was breached. Canfor announced last month it was shutting its Mackenzie sawmill, citing “prolonged poor lumber markets and ongoing production curtailments.”
Judge Brenner noted in his ruling Friday that the Canfor and Pope & Talbot mills in Mackenzie are ”inextricably linked“ and that without the Canfor chip agreement the chances of finding a buyer for Pope & Talbot's mill would be ”greatly diminished.
The Mackenzie mill employs about 250 workers when fully operational. It is currently idled.
The mill is one of three businesses that receiver PricewaterhouseCoopers was asked to sell after an earlier transaction Pope & Talbot had struck with an Indonesian company fell through.
PT Pindo Deli made two separate deals with Pope & Talbot earlier this year: one for the Fort St. James sawmill and another for pulp mills in Nanaimo and Mackenzie, B.C. as well as the Halsey mill in Oregon.
PT Pindo Deli cancelled the deal for the Nanaimo, Mackenzie and Halsey mills, which eventually threw the operations into receivership, but the Asian company wanted to keep its deal for Fort St. James.
It lost the battle in court to buy the Fort St. James mill. Instead, that mill was sold to new private forest firm Conifex Inc. for $12.8 million.
On Thursday, the court approved the immediate shutdown of Pope & Talbot's Harmac pulp mill in Nanaimo after the receiver could not find an appropriate buyer, including a bid from a group of employees.
However, the judge did give the employee group until late next week to try and come up with a better bid. Harmac employs about 400 workers.
Pope & Talbot, a 160-year-old Portland-based wood products company, filed for bankruptcy in November after fighting a losing battle with the slumping U.S. housing market, a strengthening Canadian dollar which hurt its lumber exports from B.C. into the United States, and high debt.
Canada's lumber producers have been squeezed by a 15 per cent tax on shipments to the U.S. under a 2006 deal that settled a trade dispute with the United States.
The same difficult market conditions have also led to the closure of sawmills across Canada by companies squeezed by rising inventory in the wake of slumping demand from the battered American new homebuilding market.
The pulp sector has also been hurt by technological changes and a move to Internet publication that have reduced demand for newsprint and other papers.
At the time of its bankruptcy, Pope & Talbot had eight mills, including several sawmills and the three pulp mills.
The company recently completed the sale of its sawmills in Grand Forks and Castlegar, B.C. to International Forest Products Ltd. (TSX:IFP.A), a Vancouver company known as Interfor.
Neiman Enterprises Inc. bought the company's Spearfish, S.D. sawmill and timber assets.
- With files from Prince George Citizen
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Last Updated ( Sunday, 07 September 2008 )
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can only hope that 2 mills reopen
help our little town survive ..before it die's !!