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AV Nackawic (April 01, 2008)


April 1, 2008
By Pulp & Paper Canada

At the AV Nackawic pulp mill near Fredericton, New Brunswick, they do things differently. Since reopening under the Aditya Birla-Tembec flag in the summer of 2006, the mill has bucked the trend toward…

At the AV Nackawic pulp mill near Fredericton, New Brunswick, they do things differently. Since reopening under the Aditya Birla-Tembec flag in the summer of 2006, the mill has bucked the trend towards downsizing and closure and has been successfully adjusting to meet market requirements. The mainstay output of paper-grade wood pulp is being converted into dissolving-grade pulp; initial production is scheduled for the spring of this year. (The market for dissolving grade already exists through parent company Aditya Birla Group in India, Thailand, Indonesia and China.)

It’s been a $45-million conversion and not an easy one. But the mill is alive with activity. Two years ago it was closed when previous owners Parsons & Whittemore declared bankruptcy. How could such an enormous change have taken place in such a short time?

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Kudos must go to Shailendra K. Jain, the forward-thinking group director, pulp/fibre for Aditya Birla Group. Special kudos also go to the vital young team that forms the management core at Nackawic. An attempt to revitalize the mill, with much of its workforce and morale gone, and turn it around full-steam ahead in a heavily traditional and ageing industry such as pulp and paper – some would say they were just asking for trouble. The only way to dispel the nay-sayers, however, was to succeed. How was it done? Pulp & Paper Canada ada talked to the nine young Nackawic managers gathered in one room and asked exactly that. Their camaraderie was obvious as they spoke about their involvement in this project. At 38, group leader Allan Danroth is the ‘old man’ of the group but young for his position as the operations director at AV Nackawic. (He answers to Peter Vinall, the president and CEO of the AV Group in Canada, which includes the sister mill of AV Cell in nearby Atholville, NB.) “Part of the reason for the success is that this company had the vision to unlock the business value of trees,” says Danroth. “Like bio-refining, it’s a step away from the traditional. We’re taking a different look at the business model.” Danroth looks around the room, at his team, as though seeking consensus. “It’s a perception issue,” agrees human resources manager Tyson Firlotte. “I couldn’t pass it up. How many human resources managers can be involved in starting the mill from the ground up? It was a unique opportunity.”

When the mill’s reopening was announced, the response from the neighbouring town of Nackawic was immediate. Many former employees wanted to return. However, there were not enough positions for everybody, which meant an opportunity for the mill management: Start from scratch, with the pick of experienced employees who could adapt and grow within the new structure and purpose of the company. To achieve that, Firlotte and his department interviewed almost 400 jobseekers in less than four weeks.

Selecting the Best

“Most of the people who had been working at the mill [previously] were interviewed, [there were] a lot more than I expected,” comments wood-procurement manager Stephane LaFlamme, who helped in the initial interviewing process. “We had a mandate to select the best candidates.”

The best ended up being a young group of people. Not only mill workers; Danroth notes that the mill managers’ average age is younger than the norm: “It was the right time for people to move up to challenging positions. “A number of people decided not to come back but others were ready to step up.”

Production manager Steve Frechette came to Nackawic after he had managed the shutdown at Lebelsur- Quvillon, Qubec, when Domtar halted production. He too was drawn to the challenge. “I wanted to build something, not become a shutdown specialist.”

Firlotte adds that being part of a mill start up is good to have on your resum because of its complexity.

John Howell, fibre-line manager, agrees. Citing the advanced process of chip steaming done by Lenzing, an Austrian company, Howell describes it as “A unique process -a one-of-a-kind conversion.”

Jason Acott, acting manager chemical division, points to another key area. “I started here right out of university and I don’t step away from a challenge but I had ideas and they used to fall on deaf ears.” Acott looks around at his colleagues. “These people know that this is a cutting-edge modern business. There has to be a cultural change, although it will take some time. People have to step away from preconceived notions about the pulp and paper industry.”

Some travelled a long way for the opportunity. Finance controller Krishna Khaitan is originally from India. Although the pulp and paper industry was new to him, he quickly learned the ropes. A positive attitude helped him make the decision to stay at the mill and to adjust his own expectations to the realities.

“You can’t do the job properly if you don’t understand the process,” Khaitan says as he leans forward. “It’s always good to show that you are aware of global thinking and how we can fit in. I didn’t look at the closing history when I came here. I just saw a strong future.”

Adds Howell: “You used to be able to rely on 30 to 40 years of experience. You can’t do that anymore. There’s been a total change in management philosophy.” He pauses a moment, then adds: “The difference is that now, when something doesn’t work, we will move on to try something else. We need to adapt.”

LaFlamme nods in agreement. “Knowledge is power, so we share information.”

Danroth adds: “There is not a lot of politics, we all see the opportunity in this project.

“If 80% are with you and 20% against you, you deal with the 20 but focus on the 80.”

Danroth also explains why he thinks investment in Canada is a good choice for Aditya Birla. “The Group has grown but they did not have enough pulp to fill the demand. Canada continues to have a strong advantage in the market as well as a lot of potential so it was a great opportunity for them.” He points out two big reasons: “We have a stable government and lots of resources.”

“Fresh” Management

The conversation takes a lighter turn when Howell tries to describe Danroth’s management style. “I would say, ‘young mill manager surfer dude’ running an old pulp mill with growing credibility.” The others smile and then nod as Howell continues. “Allan will admit to not knowing something but will learn fast. People appreciate that, if there’s a problem, he will ask ‘What can we do to fix it?’ “

“We’re all in new roles,” points out Danroth. “All of us are on steep learning curves and it’s been fun struggling with this new concept.” He looks around at his team. “The lines of coaching go both ways; they keep us involved.”

James Donald agrees. “I’ve learned more than I ever thought I could, just being here.”

Adds Acott: “Listening is key to turning it into reality. People are the strongest asset -that’s where I want the solution to come from.”

In turn, Frechette quotes an old proverb: “That’s why we have two ears and only one mouth.”

“It’s a young vision,” says Howell. “The company is aggressive and progressive, in a good sense. They know what they want.”

Muses Danroth: “It’s not easy in this industry for young managers. You can fly a shuttle, you can lead a country forward but this industry does not want to change.” However, the astute players embrace change, like the other major investor in AV Nackawic. “It’s refreshing what Tembec has done here,” adds Danroth.

Full Steam Ahead

For the team, it’s time to go back to work. Any last thoughts on what has been done and what lies ahead for AV Nackawic?

“It’s a challenge,” admits Danroth. “If you really want to manage a company, this is the industry that will test you. Managing a company that has money, how easy is that? Here, if we do everything right, we hope to break even -that’s a lot of pressure.”

Firlotte notes it can’t all ride on the people in the room. “Success relies on the people out there [in the mill]. Bu
t your career has found a home if you fit into the organization. That’s when we will all develop and grow,” he adds.

Or as Danroth sums up: “We put a lot of effort into strategies and we embrace technology. We work with unions and we are partners with all the rest as well.”

A youthful and vibrant team, a good product, a promising market and a cohesive team. It’s a challenge well answered.

———

“These people know that this is a cutting-edge modern business. There has to be a cultural change, although it will take some time. People have to step away from preconceived notions about the pulp and paper industry.” –Jason Acott

———

When Past Meets Future

“Some of us have not been able to adapt,” says Glen McGuigan, mechanical maintenance superintendent. “I feel that I have adapted to the change. That tells me that I have been successful, because this is a new company going in a new direction. You’re either going to be a player or not.”

Asked what kind of changes he had seen, McGuigan replied, “The biggest change that I see is that this company is very focussed from the top down. The assurance is that we know the support is there. It’s been tough going into it and they have a vision. But when they explain to you what they see or what they want, we can take that into the bank.” He thought about it for a moment. “Yes, that’s the biggest difference. The managers before were on their own and consistency wasn’t there. It makes my job easier.”

McGuigan explained that with the other company, there had been a collective agreement, with many different arrangements that clouded issues.

“This is just a much better environment.” For instance, he explained, the people who were not able to adapt, who had the biggest problems, felt that they had all the answers and would show the new company how the mills should be run. But this company did not want the mill run the way the old company had been run. The people who were here the longest are having the toughest times.

He ended on a highly positive note: “This company keeps every person informed of their future intentions, we feel as though we are more a part of that company and can contribute to those goals. This company has tremendous potential. I am encouraged.”

His last words? “Those young managers depend on older guys to get the message out and explain to those who have a different attitude so that they can convince people under them. Allan is open and listens. That means a collaborative approach -and for the company [it means] a win-win situation.

———

“It’s a challenge. If you really want to manage a company, this is the industry that will test you.”

-Allan Danroth


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