August 11, 2008

Canfor pulls plug on North Central plywood plant

PRINCE GEORGE, B.C.

Canfor officials have told employees the North Central plywood plant will not be rebuilt, according to the president of the Pulp and Paper Workers of Canada Local 25.

Jim Kennedy said Canfor senior officials delivered the news via a short conference call.

A massive fire levelled the plant over the night of May 26.

“We went through the shock of the mill burning down and now we’re going into the shock of the plant not being rebuilt,” Kennedy said.

The decision means about 260 unionized employees are out of work. Kennedy could not comment on the fate of the 30 or so front office and management staff.

Fibre supply, financial and market conditions were listed as the factors in the decision, according to Kennedy, who said the announcement came as a surprise.

“It is because NCP was a money maker,” he said. “It didn’t make a whole ton of money, but it was a money maker.”

Forests Minister Pat Bell and NDP forests critic Bob Simpson said they are disappointed by the decision.

“This is not the outcome that we were looking for,” Bell said. “I had certainly expressed my interest to Canfor a number of times that we were interested in seeing the operation reopen and that we would do what we could.

“They continued to express to us that they wanted to work with us, but that it had to be an economic decision and I understand that . . . but you can’t paint this one as a positive picture.”

Bell said he believes an interest in investing in its other operations was a key reason for Canfor’s decision, “to make sure that they are the most efficient operations in North America.

“That’s important in a tough marketplace like we’re in right now because we don’t want to see any other closures of any other operations. It’s not good news but it is what it is.”

But he added there is room in the region for another plywood operation.

“I am always open to suggestions from different companies that have an interest in that sort of thing,” Bell said. “It is not a highly-intensive use of fibre. That particular plant, I think, was consuming 300,000 cubic metres per year, which is not a huge amount of volume and I’m sure volume we could find if someone was interested in a plant of that nature.”

Simpson said the news is one more reason to reinstate a mill closure review process so such decisions are made in a more public way.

“We don’t know what options were and were not explored, the union was never really given an opportunity to put concessions on the table.

“We don’t know if the government was involved in the process, none of that, and yet all of this economic activity is based on a public forest,” he said.

Simpson added one of the reasons for Canfor’s decision may have been uncertainty over the long-term fibre supply.

“It could very well be that Canfor looked at the decision and said, ‘Look, we’ve only got three or five years of good plywood grade or peeler grade logs available to us and that doesn’t justify making the investment,” he said.

With the decision, Simpson said there remains the question of what will be done with the logs previously used to supply the plant and contended some form of appurtenancy —where timber is tied to a particular mill — needs to be reinstated.

“Are (the logs) going to go to benefit other communities or other companies while 220 people have just lost their jobs?” he said.

And he cast doubt on Bell’s suggestion that another plywood plant could be built.

“The logs are under forest licence to Canfor,” he said.

“Canfor is a big player with deep pockets. If they’re choosing not to invest in Prince George and rebuild that plywood plant, then I would suggest that Pat Bell is blowing smoke. Who else is going to invest in the forest industry at this juncture?”

Canadian Press

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