Pulp and Paper Canada

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Industry News (April 01, 2006)


April 1, 2006
By Pulp & Paper Canada

MILLS

MILLS

CANFOR SPINS PULP SEGMENT

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VANCOUVER, BC — Canfor is spinning its pulp segment into a separate income trust. According to a report by the Vancouver Sun, observers are speculating that the move is potentially the first step in consolidating the province’s Interior pulp industry under one umbrella.

President and CEO Jim Shepherd confirmed the company’s intention to preserve 80% ownership in the trust, while the outstanding 20% will be disseminated amongst its shareholders.

The Vancouver Sun further reported that despite the pervasion of rumors that the business would be sold, Shepherd surprised the Prince George community by announcing the establishment of the new pulp company. Shepherd said the separate business is in line with the company’s objective of concentrating more heavily on solid wood products.

ENERGY

PRICE CAP NOT ENOUGH: CEP

THUNDER BAY, ON — An announcement made by Ontario Energy Minister Donna Cansfield of a three year extension of the price cap on electricity rates for large industrial users has the Communications, Energy and Paperworkers’ Union scoffing.

“This announcement preserves the status quo and it is the status quo situation which has cost more than 3,500 of our members their jobs in the last two years,” said Cecil Makowski, Ontario region vice-president of the CEP. “We need special provisions to reduce the energy bill for paper mills and other forest-based industries or we are going to have many more closures in the weeks to come.”

According to Statistics Canada, Ontario suffered the loss of upwards of 52,000 well-paying industrial jobs in 2005, the bulk of which were taken from the pulp and paper, auto and chemical sectors.

MILLS

TEMBEC SCALES BACK TIMMINS SAWMILL

TIMMINS, ON — The lay-off of 19 staff and hourly employees will put $1.4 million of savings back in Tembec’s pockets every year, the company has said of the decision to introduce cost-reduction measures at its Timmins, ON, mill.

“Decisions of this nature are never easy and Tembec regrets the impact that the steps announced today will have on affected employees and their families,” said Dennis Rounsville, executive vice president and president of the company’s forest products group. “We will reduce the sawmill’s expenses by restructuring and reorganizing certain functions, including production and maintenance.”

The measures were fully implemented by February 20, and resulted in a workforce reduction from 124, down to 105.

Referred to as “Operation Intensive Care,” the scaling back is part of a larger project designed to make the company more profitable. Five sites and one woodlands facility are included in the project, which will involve the revision of the operations and the drawing up of an improvement plan for each.

MILLS

MEADOW LAKE GETS GOVERNMENT HELP

MEADOW LAKE, SK — Meadow Lake pulp mill is set to receive $15 million from the Saskatchewan provincial government.

The facility, currently sitting on shaky ground, has suffered several blows as of late. Although the past few years bore witness to a government cash infusion of $800 million through various loans, after a series of write-downs, that investment was valued at zero last year.

According to a CBC report, Investment Saskatchewan, a Crown corporation that currently holds a 50% stake in the facility, will be providing the money. The loan is part of a court-supervised restructuring process.

The CBC further reported that government officials contend that Millar Western, the private sector partner in the deal, is looking to disentangle itself from the restructuring process and has offered to sell its share of the mill for a minimal price.

ENVIRONMENT

CASCADES ADVISES WALMART

MONTREAL, QC — Retail giant Walmart Stores Inc. has solicited the services of Cascades in its quest to make its paper products more environmentally friendly.

According to a report by the Montreal Gazette, Cascades received a request from Walmart to join an advisory board, as the only Canadian supplier and the only major recycler in the project.

“They have liked the way we do business, the way we present our (corporate) image and our products,” the Gazette reported CEO Alain Lemaire as saying.

The Gazette further confirmed that in the month of October, Walmart announced it would be upping the ante in terms of holding its suppliers responsible for environmental and social standards.

EMPLOYMENT

DOMTAR OPENS EMPLOYEE SUPPORT CENTRE

OTTAWA, ON — March 1, 2006 marked the opening of Domtar’s Employee Action Centre. A partnership between Domtar, the Federal and Ontario governments, the centre was set up in order to offer support to the 185 workers slated for a March 31 layoff, and to help them secure new employment.

Similar to the Domtar Action Centre established in Cornwall, ON, that opened in March of last year, this location will focus on a range of services designed to put workers in touch with the resources they need to find new jobs. Career counseling and referral services will be provided, as will information workshops and seminars.

“Our company is very aware of the impacts of the closure of the Ottawa paper machines on the lives of the employees who have been laid-off,” said Robert Dufresne, operations manager at the Ottawa-Hull mill. “We take responsibility for providing adequate support through the period they need to reposition themselves for the workplace.”

MILLS

CANFOR BUYS NEW SOUTH

VANCOUVER, BC — Canfor has wrapped up the acquisition of New South Companies. Included in the purchase are three sawmills, one remanufacturing facility and two lumber treating facilities, located in North and South Carolina, as well as an international import business.

LEGAL

NORBORD NAMED IN ANTITRUST ALLEGATIONS

TORONTO, ON — Norbord, along with six other North American oriented strand board (OSB) producers, has been named in an antitrust lawsuit.

Allegations of price fixing in order to reduce the supply of OSB from June 1, 2002 to the present, have been manifested in five separate lawsuits filed in the U.S.

Sawbell Lumber Co., Norwood Shash & Door Manufacturing Co., Columbare Inc., West Lumber Co., and Frontier Lumber Co., along with Norbord, are named plaintiffs in the lawsuits.

Norbord has confirmed it believes the lawsuits to be ‘entirely without merit’ and ‘intends to defend them vigorously.’

Ainsworth Lumber was also recently named in an antitrust lawsuit, and plans to take the same route of defense as Norbord.

SALE

CASCADES WRAPS UP FINE PAPERS DISTRIBUTION SALE

KINGSEY FALLS, QC — Cascades has completed the sale of its fine papers distribution assets, known as Cascades Resources, to PaperlinX Canada. Of the $81 million Cascades collected from the transaction, $77 million has already been received and used to pay down the company’s debt.

“This transaction will allow us to strengthen our balance sheet and financial ratios while continuing to provide, through a distribution agreement, specialty fine paper products at our St-Jrme mill,” president and CEO Alain Lemaire said of the sale.

FORESTRY

CANADA’S FORESTRY INDUSTRY LEARNING HARD LESSONS

OTTAWA, ON — “Graduates of forestry programs are needed and in demand,” said Alex Drummond, a professor at the University of Alberta. According to Drummond, immediate attention is needed in order to bridge the widening gap between the overwhelming number of people retiring from the industry and declining enrollment in forestry sector programs.

The past ten years have marked a dramatic drop in the number of students over th
e age of 25 choosing to enter post-secondary forestry programs at technical/technologist and university levels. Drummond contends that if the problem is not soon addressed, Canada’s forestry sector will have a crisis on its hands.

“The forest sector plays an important role in the stewardship of Canada’s forests as well as its modern and technologically advanced outlook, a role that is often misunderstood,” he said. “There is also a misconception about jobs and career opportunities in forestry,” he noted.

A report released by the Canadian Institute of Forestry entitled, “The Crisis in Post-Secondary Enrollments in Forestry Programs: A Call to Action for Canada’s Future Forestry Professional/Technical Workforce,” highlights some of the major issues contributing to and compounding the problem. The document states that, “if graduate and career technology forestry programs are discontinued, it will be increasingly difficult to find the next generation of forest practitioners and other qualified, trained modern forest workers to maintain the important economic standing of the forest industry in Canada.” The report calls for partnerships with industry, government, professionals and post-secondary forestry schools to encourage the pursuit of careers in the sector.

PAPERCLIPS

PAPER TOWEL PALLET PLOT

Apparently some people use paper towels for things other than wiping up their kitchen counters.

According to News4Jax.com, inspectors at the Florida Agricultural Inspection Station reported the seizure of 1,733 pounds of marijuana, from a tractor-trailer shipment of paper towels allegedly on their way to Orlando.

According to the report, two men were arrested after inspectors discovered 85 packages of the drug, estimated to be worth $3.9 million, hidden on pallets underneath stacks of paper towels.

Jose Ledesma, of Mexico and Harry Gonzales Quezada, of Guatemala, have been charged with felony marijuana trafficking, and at the time of this report, are being held in the Suwannee County Jail on a $1 million bond.Source: News4Jax.com

LOGGING

UPM SETS UP ‘TRACING RUSSIAN WOOD’ WEBSITE

HELSINKI, FINLAND — In response to the increasing concern over illegal logging in Russia, UPM has established a website dedicated to focusing on how the company carries out its wood sourcing operations in the country. The site is the continuation and development of a United Nations award-winning project that aims to increase transparency in the paper supply chain.

The site contains features such as stakeholder video clips from Greenpeace and the Russian Ministry of Natural Resources, flash presentations depicting the path of a log from the Russian forest to the magazine shelf, and an interactive TraceIT mapping system, as well as the views of Russian people on the social and economic importance of forestry to Russia. For more information, go to www.upmkymmene.com/traceit


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