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Bowater Mersey not competitive; indefinitely idled by Resolute

Resolute Forest Products indefinitely idled operations at the Bowater Mersey newsprint mill on June 17, in spite of concessions granted several months ago by employees, provincial and municipal governments, and Nova Scotia Power.

Resolute Forest Products indefinitely idled operations at the Bowater Mersey newsprint mill on June 17, in spite of concessions granted several months ago by employees, provincial and municipal governments, and Nova Scotia Power.

The facility, in Brooklyn, Nova Scotia, is a joint venture between Resolute (51%) and the Washington Post (49%). Resolute is assessing the feasibility of selling all its assets in Nova Scotia.

“The mill produces newsprint primarily for export markets and is unable to compete due to declining prices in those markets, caused mainly by unfavorable currency fluctuations,” stated Richard Garneau, president and CEO of Resolute. “We have worked diligently with the provincial government, our employees, union leadership and other stakeholders but simply could not overcome the inherent challenges.”

The indefinite closure reduces capacity by approximately 250,000 tonnes of newsprint. Approximately 320 employees at the Mersey paper mill, associated woodlands, Oakhill sawmill and Brooklyn Power Corporation will be affected by this action.

Last fall, in an effort to keep the mill open, the Nova Scotia government pledged $25 million in forgivable loans to the company ($5 million per year), provided another $1.5 million for training and purchased 10,000 hectares for $23.75 million. According to local media, the loaned funds have been returned, since they were contingent on the continued operation of the mill.

Resolute spokesman Seth Kursman told Canadian Press that workers made sacrifices to try and save the mill as they agreed to wage concessions as the province offered financial assistance.

“Everything that was really in the direct control of the people here, of government, of stakeholders across the board, people did, they stepped up and it makes the situation that much more frustrating,” he said in an interview that appeared on the Globe and Mail website on Friday, June 15.

Resolute owns or operates 21 pulp and paper mills and 22 wood products facilities in the United States, Canada and South Korea.