Sawmill owner sees renewed opportunity in help to NewPage

Published on August 20, 2012

BARNEY’S RIVER –  Hope is on the horizon following Monday’s announcement that the provincial government is offering $124.5 million to a Port Hawkesbury paper mill.

Eric Williams, owner of Williams Brothers Sawmill in Barney’s River, said reopening NewPage this fall will create a more competitive market for people in the forestry industry.

“We were hurt quite bad when it shut down, so every little bit helps,” he said. “It will create a better market for hogfuel and more opportunity for log supply.”

Williams said he had three trucks hauling product to NewPage before it shut down and when it reopens he expects one of his trucks will be heading back towards Port Hawkesbury. The Williams Brothers purchased logs from NewPage at market value and chipped the wood, selling it back to the pulp mill along with hogfuel which is a combination of bark, sawdust and wood shavings.

The provincial government announced a $124.5 million funding package for NewPage Monday so that it could resume operations by the fall. Under the deal, the provincial government is offering Pacific West Commercial financial incentives including $66.5 million in loans, $26.5 million of which could be forgiven if the company meets certain criteria.

The government also agreed to buy about 20,840 hectares of land from NewPage Port Hawkesbury for $20 million. That money would go to the mill’s creditors. It would also give Pacific West Commercial $3.8 million annual for 10 years to support forest land management and sustainable harvesting.

Premier Darrell Dexter made the funding announcement after Nova Scotia’s Utility and Review Board approved Pacific West Commercial’s application for a special power rate deal with Nova Scotia Power. Under that arrangement, the private utility company would receive tax-free divided payments for electricity instead of a regular tariff. The deal would last until the end of 2019. The board’s decision will still require approval from the Canada Revenue Agency.

Pacific West Commercial said the deal is critical in its efforts to reopen the mill, which it is planning to buy for $33 million. NewPage shut down last September, laying off some 600 employees and affecting another 400 forestry contractors.

Pictou East MLA Clarrie MacKinnon said the province’s funding agreement is good news for the 37 companies in his riding that were owed money when the plant shut down last year.

“It will put 330 people back to work and protect 600 indirect jobs in the woodlands and another 500 jobs in local communities,” he said. “Small companies still have a chance to get back in operation and get back into the mill.”

He said due to the complexity of the forestry industry and all the people involved, the closure had a widesweeping effect. For example, he said, heavy equipment operators who build roads for harvesters were affected by the closure because of the downturn in the market.

“At least some of the companies will be back in business with the new operators,” MacKinnon said.