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.