The Meadow Lake pulp mill in Saskatchewan has filed for bankruptcy.
The Meadow Lake pulp mill in Saskatchewan has filed for bankruptcy.
Jointly owned by Millar Western Industries and the provincial government, the facility has secured creditor protection, and a window of opportunity to get its affairs in order before being forced to repay its debts.
The mill will remain in operation in the interim, however, the bankruptcy declaration doesn’t bode well. Pressures imposed by high energy prices and sinking pulp prices, compounded by a strong Canadian dollar, have made it difficult for the mill to keep its head above water. The month of November witnessed the provincial government writing down its investment in the Meadow Lake facility by $125 million. The CBC recently reported that despite a considerable $320 million investment the provincial government made in the mill over the years, that venture is now valued at zero.
This creditor protection comes as yet another blow to the Saskatchewan forestry industry. In October, Weyerhaeuser announced closures at its pulp and paper mills in Prince Albert, threatening roughly 700 jobs. Those closures will begin to be implemented this week.
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