Canfor Pulp expects to receive federal government sign-off within days for an $107-million upgrade of its Northwood pulp mill recovery boiler, which is eligible for funding under an $1-billion Conservative government subsidy program.
The project - which is expected to significantly reduce odours and fine particulate air pollutants - has already been approved by Canfor Pulp's board of directors, analysts were told during a discussion of the company's third-quarter $54.5 million profit.
The Northwood project has also passed its environmental assessment, said Brett Robinson, Canfor's vice-president of operations, who overseas the company's three pulp mills in Prince George.
"We have not formally got that approval (sign-off from the federal government), but we don't anticipate any issues in getting it," said Robinson, in response to a question from an analyst on Tuesday.
The company has already undertaken preliminary work on the Northwood recovery boiler upgrade, and is getting set up to start the majority of the work in the third quarter of 2011.
The company anticipates no problems in completing the work by March 31, 2012 when the federal government subsidy program is supposed to be complete.
The Conservative government announced the $1-billion subsidy program in 2009 to offset a massive American subsidy program. Canadian pulp mills had to use funding to reduce their environmental impact or reduce energy use. As part of the Canadian program, Canfor Pulp was eligible for $122 million in funding.
Canfor Pulp, which employs about 1,100 people, has already been awarded $15.6 million in federal funding for two projects under construction.
A $4-million project to increase power production at the Prince George and Intercontinental pulp mills is expected to be complete before the end of the year.
An $11-million project to reduce odours at the Prince George pulp and paper mill is also well underway and expected to be complete in April 2011.
That project has already received accolades from the city's air-quality advocacy group, the People's Action Committee for Healthy Air.
Fine particulate air pollutants are considered a leading air quality concern in Prince George, although there are also concerns over odours from pulp mills.
Canfor Pulp noted it has record sales of $247.9 million in the three months ending in September. Pulp prices, which had reached a peak of $1,020 U.S. a tonne in July, had fallen off to
$990 by September. The price in October dropped further to $970.
Canfor Pulp president and CEO Joe Nemeth said despite an expected continued downward trend in the remainder of the year, the company is well positioned for more strong results as a result of its low-cost operations and strong production.
RBC Capital Markets forest analyst Paul Quinn noted that pulp markets have weakened from their peak, it's at a modest pace. Current prices are well above break-even points.
