Newfoundland officials have confirmed that all or almost all of a $90 million business fund set aside in the provincial budget is destined to be a loan to Kruger’s Corner Brook mill. The terms of the potential loan have not been revealed.
Newfoundland officials have confirmed that all or almost all of a $90 million business fund set aside in the provincial budget is destined to be a loan to Kruger’s Corner Brook mill. The terms of the potential loan have not been revealed.
According to CBC.ca, the loan will kick in when the company finishes negotiations with labour unions at the mill.
CBC.ca reports that Natural Resources Minister Tom Marshall said the loan to Montreal-based Kruger Inc. is a wise investment. “Corner Brook Pulp and Paper is a key employer and a strong contributor to the economy of this province,” he said. “The mill is important not only to the west coast of Newfoundland but to the entire province.”
However, at least one industry analyst has pointed out that Corner Brook is a relatively high-cost producer of newsprint.
Kevin Mason, an analyst with Equity Research Associates, told CBC.ca that given the state of the newsprint industry, the prospects for high-cost mills do not look good.
“So in an industry that’s in a war of attrition … and generally it’s going to be the high-cost ones that will eventually shut, that’s obviously a little bit of a concern out there,” said Mason.
Mason said he wasn’t completely surprised with the announcement, given that Corner Brook Pulp and Paper is the last surviving mill in the province.
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