Tolko Industries announced today that it will close its Manitoba operations on December 2, 2016. The facilities in The Pas, Man., include an inactive sawmill, a chipping operation and a kraft paper mill, employing about 330 people.
“This is not a decision we have entered into lightly,” said president and CEO, Brad Thorlakson. “Over the 19 years we have been in the community, a great deal of work has been done, both internally and externally, to improve the mill’s competitive position. Unfortunately, despite years of continued effort to improve the cost structure and business results of the operations, the business is not financially sustainable.”
Jim Baskerville, vice-president of OSB and kraft papers, said full details of the transition package will be available to employees the week of Sept. 6.
Tolko is one of the largest employers in The Pas, a community of about 5500 in northern Manitoba.
“This is a very sad day for workers and the community that has invested so much into the mill over the years,” said Joie Warnock, Unifor Western Director.Unifor Local 1403 represents 234 mill and office workers and Local 342 represents 30 supervisors at the Tolko mill, which first opened in the late sixties. Tolko purchased the Manitoba kraft paper and sawmill operations in 1997.
Thorlakson noted that the decision to close the mill is in no way a reflection of the people, community or local and provincial governments who have played such an important role in the operation over the years.
“We have valued our time in The Pas and have great respect for the community and our employees who have been with us on every step of this journey. We understand that this will be a very difficult time for them and the community, but we cannot continue to sustain the losses at the operation.”
Tolko’s Baskerville reassured the company’s customers that the mill’s fibre supply is secure and we are well equipped to fulfill our commitment to customers until closure is complete.
According to various media reports, there are efforts being made to find a buyer for the Tolko Manitoba operations.
An article on the Winnipeg Free Press site, notes that Tolko’s The Pas mill has high energy costs, high transportation costs and “lacks the economies of scale that integrated lumber and paper mills enjoy.” In a submission to Manitoba Hydro, the company said its power costs per tonne of paper increased 33 per cent between 2010 and 2014.
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