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Provincial government is hoping to attract buyer for DSME Trenton

Nova Scotia Business Minister Geoff MacLellan visited former DSME Trenton plant on Thursday for a first-hand look at the property. The government has a commitment until the end of this fiscal year to contribute funding to its minimal operations that basically keep it at status quo as it moves through receivership. He said a buyer is still needed for the property and the best-case scenario would be to see it sold as is rather than liquidated.
Nova Scotia Business Minister Geoff MacLellan visited former DSME Trenton plant on Thursday for a first-hand look at the property. The government has a commitment until the end of this fiscal year to contribute funding to its minimal operations that basically keep it at status quo as it moves through receivership. He said a buyer is still needed for the property and the best-case scenario would be to see it sold as is rather than liquidated. - Sueann Musick

TRENTON

Almost two years to the day, the Liberal government is back in Trenton hoping to generate some interest in the town’s former railcar plant.

This time, Nova Scotia Business Minister Geoff MacLellan visited the area for an up-close look at a facility that has been mothballed for two years after DSME Trenton shut down its wind tower production in February 2016.

MacLellan doesn’t mince words about the visit, clearly stating that he hopes some media attention on the facility will attract a new buyer because the best-case scenario is to see it sold and operating again.

“It’s been two years and with the receivership process we have allocated $150,000 per month in the operational investment here in DSME just to keep it status quo, so for us the investment has certainly been important to keep things intact for the receiver to do their work but we are getting to the point where we have to make a decision,” he said during a tour of the plant.

DSME Trenton Ltd. (DSTN) closed the plant Feb. 19 and it was placed in receivership shortly afterwards. DSME South Korea said it closed the plant because it was undergoing a major company restructuring that included closing the Trenton location.

The Korean company purchased the former rail car facility in 2010 in hopes of breaking into the North America Wind Energy sector but it did not achieve the results it had hoped for in the five years. Under the former NDP government, the facility received $56.3 million in provincial money and Nova Scotia owned 49 per cent of the shares.

However, in January 2016 the Liberal government said it was not interested in investing more money in the company and within less than a month the company shut the doors.

MacLellan said there is still interest in the plant, but potential companies failed to meet all of the points required in the receivership process.

“It requires a down payment be made and that hasn’t happened and we are not there yet,” he said. “It is all speculation and kind of wishful thinking until we get the deposit and we get a group that is serious and then we can move to the next step.”

The tour Thursday proved to him that the area and plant are still viable.

“The turbine construction area is largely intact and the investments made there are visible,” he said. “The older buildings most likely require remediation and demolition. There is a lot of different parts to this. Some aspects would be viable for the private sector and some wouldn’t.”

He said a worst-case scenario is liquidation which would require the sale of assets and land. A second option would be to identify the assets and figure out individually which ones would be of interest to a private sector operator.

“For us the best-case scenario is to find a buyer and purchase this site total.”

Timeline:

March 2010: Daewoo Shipbuilding and Marine Engineering made an agreement with the Province of Nova Scotia to open the facility as a world class wind tower manufacturer.

June 2010: DSME and the Province of Nova Scotia officially signed documents to make the transaction official.

June 2011: DSTN Grand Opening.

September 2011: First tower section rolled off the assembly line.

January 2013: DSTN receives ASME certification, allowing for the production of pressure vessels and boilers. This gave DSTN the opportunity to diversify its business and serve a new market.

May 2013: DSME Trenton Ltd appoints Myong-Jun Park as the new president and CEO of DSTN.

September 2013 – DSTN delivered its first 30,000 gallon pressure vessels for the oil and gas industry.

August 2013: Towers for the Hermanville Clearspring Wind Project began to be delivered to their destination in Prince Edward Island.

2014-15: 34 five-section towers for the 102 MW South Canoe Wind Project in Nova Scotia were manufactured in 2014, with the final shipping completed in January 2015.

January 2016: Media reports circulate that the company is getting ready to close. Unnamed employees say the company is selling off equipment and winterizing the plant. The company says it is open for business and looking at manufacturing pressurized tanker cars.

February 19, 2016: Nova Scotia Finance Minister Mark Furey visits Trenton to announce that the province has received word that DSME Trenton will be closing its doors permanently.

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