DAILY NEWS Nov 5, 2012 11:10 AM - 2 comments

Minas Basin closing mill; cannot achieve long term sustainability

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Saying the mill is not viable for the long-term, the owners of Minas Basin Pulp and Power have announced the containerboard mill in Hantsport, N.S., will close in December 2012.

In a memo to employees, Scotia Investments Limited stated: “With last year’s restructuring of operations and adjusting of the workforce, many have remained hopeful that, together with some recent improvement in pricing, the mill could be competitive. However, after several years of challenge, the board has concluded that it is time to recognize that the mill is at the end of its cycle. Long term sustainability cannot be achieved.”

The company cites marketplace challenges, increased competition from newer, more efficient mills, and rising operating costs as reasons for the closure. It is not seeking support for the mill from the provincial government.

The closure affects 135 employees, but Scotia Investments says about 40 will be offered employment at Minas Basin’s sister company, CKF Inc., which makes molded pulp products. CKF is also located in Hantsport.

Scotia Investments also noted it “will be fulfilling all employment obligations, including the pension plan.”

In a Canadian Press story published on Macleans.ca, Robert Patzelt, Scotia Investments’ vice-president of corporate development, said pouring more money into such a small mill just wouldn’t make sense.

“The reality is that … additional money from the government (would be) inadequate to overcome those structural and economic challenges,” he said in an interview.

“In this instance, you would have to build a new mill and it would have to be huge and it would have to be located somewhere else.”

Scotia Investments’ letter specifically thanked Scott Travers, former president of Minas Basin, for his contributions. “Scott joined Minas Basin as an engineering student and has contributed passionately and steadfastly to the vision, innovation and spirit of this entire organization. During his tenure, we’ve been recognized across this province and in the industry, for many innovative energy and process solutions, making us one of the greenest mills in North America.”

Terry Gerhardt, vice-president, operations, will be leading the mill’s transition. The energy division of Minas Basin Pulp and Power will continue as a going concern, as will CKF.

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Reader Comments

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A couple of things you left out.....in the last 10-15 yrs bunker C oil has tripled, the waste paper they use to make the paper went from approx 40$ per tonne to approx $250 per tonne....not to mention the price of their product they make dropping as they were building their faster machine 17yrs ago. No more to it than that.

Posted November 6, 2012 02:07 PM

Paper Boy

Minas Basin has operated for eightyfive years, up until fifteen years ago the company operated with a paper machine that operated at approximately one third the production of the current machine and still managed to survive.
Minas Basin had made a poor investment in an American paper mill at Newton Falls recently which cost them alot of money. They have also been investing money in energy research and development side of the company which didn't help the current bottom line.
Minas Basin has several advantages that other paper mills may not have. The Scotia Investments Company that owns Minas Basin Pulp & Power and several other companies operates as somewhat of a food chain. They have a recycling plant which provides their raw material. They have ownership in a trucking company that ships alot of their products. They have owership in a box making plant as well as a plant that produces sauna tubes. They have their own freash water supply as well as their own hydro power plants which produce up to thirty percent of the required power to operate Minas Basin.
The company has many irons in the fire right now, the company has been looking into Tidal Power in conjuction with a company from England called Marine Current Turbines to look into launching tidal power generators in the Bay Of Fundy. They have also been recently awarded a two hundred million go ahead by the government to build about two hundred million in wind power turbine projects.
The Minas Basin plant would be an ideal launching site for these new projects with its proximity to the Bay Of Fundy and access to the deep water of the Minas Basin.
The company has refused to pursue any help from the government as other paper mills have done in the recent past. They have not looked for a break on power,property taxes,etc, as other mills have done to help make their business more sustainable, they have refused to look into finacial assistance from the government to see them over this tough time in hopes the market may turn around.
I'm not sure why this company that has so many advantages that other mills in the same product line do not have can't seem to survive in these economic times. The mill is supposed to be dismantled and sold to a Mexican buyer as soon as it is decommissioned on Dec 14,2012. This company has been infamous for not removing any decommissioned equipment until the real estate it is occupying is desired for another project.
What is really going on at this paper mill? Why is it closing the doors when they produce a product that is in demand? Maybe to produce and deploy some of the formentioned, or maybe they just have to close the doors for the reasons they claim. What ever the reason, I'm sure this will not be the last we hear from Minas Basin Pulp & Power Co Ltd.

Posted November 5, 2012 05:25 PM

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