Custom Search
Top Stories
Go to Site Index See "Top Stories" main page
NEWS RELEASE · 15th July 2010
Walter McFarlane
PART 1: SACKCRAFT PAPER FROM PULP LOGS THE KEY

Just over 150 people flooded into the community room at Riverlodge on July 6th to listen to the presentation on the Eurocan Viability Study and the potential for the Mill. Rob Goffinet introduced the evening and greeted everyone and people were still coming through the doors as the meeting began.

Goffinet introduced the people at the front table and called the first speaker, Councillor Randy Halyk who has been one of the two members of Kitimat City Council working on the Eurocan Viability study.

“This is a very important evening and hopefully we can enlighten people,” said Halyk. “We’ve been working on trying to understand whether the Eurocan Mill is Viable from many months back.”

“What we have been looking at is a business proposal with will benefit all the regional forest industry and create jobs. This is a work in progress and it’s at a very high level,” said Halyk. “We want this mill to come back only if it’s viable.”

He explained they decided on a co-op to see if any workers would be interested in investing in the new mill. He said the group was formed by Council, the Unions, the Chamber of Commerce, Ministry of Forest, Rural Secretariat, BC Forest Coalition and Business Financial.

Halyk moved on to Poyry’s Viability study. The study was a review of the market and potential product lines. They looked at environmental concerns, the fibre supply and labour. Poyry put together a model under which the mill would be viable.

“’In previous model, mill net returns unable to support mill cost structure’” read Halyk. He explained the new mill: “Will run entirely on pulp logs with one machine, the sack craft machine. The mill used to produce linerboard and sack craft. The biggest portion of the mill’s product was the linerboard and it was determine that we could not be able to continue to make that with the economic conditions the way they are. As terms go, a smaller foot print using one machine to produce sack craft, which is what you put dogwood in or flour. Basically making sacks.”

He explained they were able to find a group which had lots of fibre, people who were harvesting pulp logs without being able to use them. With the new model, the people who make and ship the logs would be able to make money with the mill spreading money across the Sacred Circle. They would also be able to upgrade the docks.

Upgrading the docks would create a scenario for log exports. To be able to transport the logs without getting them wet. Halyk explained some ports do not accept logs which have been transported this way.

Now the group knows this is viable, the next step is to seek out investors. Poyry is looking for investors. A West Frasier is willing to listen to a substantial proposal from an investor. He asked anyone present to open their chequebooks and invest in the opportunity.

He reminded the people who attended the time is almost up. The deadline of the 15th of July was fast approaching and when it passes, West Frasier will start selling the assets. Halyk concluded the Eurocan Pulp and Paper would be cash positive if they chipped pulp logs. It would include forestry jobs, service jobs and reduce waste fibre.

He expressed they should not ship raw logs out of he country, they should manufacture them here but this would not happen overnight.

“This is a significant benefit to everyone in the region,” said Halyk.

PART 2: INVESTORS WANTED FOR MILL

It was July 6th. The Riverlodge Community room was packed full of people to listen to how they could save Eurocan. Councillor Randy Halyk had already spoken and now it was time for Mary Murphy, president of CEP 298 to speak.

Murphy started by saying it had been 7 months since Eurocan had shut down. “7 months of pretty hard work by dedicated people,” said Murphy.

She recognized the people who had worked with the viability group who were unable to attend the meeting.

Murphy explained everyone had been digging into their pockets to try and attract an investor. She said she has been contacted by former Eurocan Workers who have been able to find work elsewhere but wish to move back to Kitimat and invest in the new mill.

However, a lot of people have moved on and there will be issues. She said there were funds available for training. In addition, there are people in the community who are interested in investing. They believe the Mill is viable and this would be an opportunity for the community.

PART 3: THE FIBRE IS AVAILIBLE

July 6th in Kitimat. The Riverlodge community room was jam packed with people eager to learn more about the Eurocan buy in. There were two speakers remaining. Representing the Ministry of Forests was the District Manager of the Kalum Forest District, Barry Dobbin.

Dobbin explained Councillor Randy Halyk had invited Premier Gordon Campbell as well as his Cabinet Ministers to attend this meeting. However, they were unable to attend because they were in Caucus. Dobbin took their place.

Dobbin gave the history of the Forest Coalition. In March 2009, Forest Minister Pat Bell came to the North West and met with forest licences to a meeting in Terrace. The minister proposed pooling the fibre volume to try and attract business to the Sacred Circle.

So far, 14 investors including the Eurocan Viability Committee have approached the Coalition. Bell came to Kitimat to meet with Mayor and Council, the Union and Chamber of Commerce.

“He heard the same thing through out the whole day, the groups that were here wanted to have their own viability study to access the feasibility of the mill,” said Dobbin.

He explained the Ministry of Forests and the Ministry of Community Development supported the study with all the other groups. The Forestry Coalition agreed they would provide pulp logs in the case they can find a new investor.

The Model would require 17000 cubic metres of pulp logs to run the operation. The pulp logs would be brought to Kitimat for the Mill while the saw logs would have to find a different market until they could be processed here.

He suggested there are other investors looking at the logs but they have agreed to hold onto the volume in the hopes this project is successful.

“There is a lot of hope that the model which goes forward will be creating other spin-offs. Some of the other investors I mentioned want a smaller volumes with a smaller degree at a much lower cost. They just want the waste logs. We can’t give access to something like that unless the rest of the industry is already operating and there is a lot of activity in the area to make those valuable so this would create other synergies and benefits for the whole northwest we look forward to as well,” concluded Dobbin.

PART 4: ON CO-OPERATION

Kitimat: July 6th, Riverlodge. The community room was packed with people eager to learn about investing in Eurocan. The next speaker was Marty Frost representing the Western Labour Workers Coop Council.

Frost explained in the coop model, the workers were a stakeholder in the operation of the mill which is autonomous, jointly owned and democratically controlled. Frost’s presentation differed little from the last time he was in Kitimat, found here.

He did say if the mill did reopen, it would not be there to maximize profit but to fit the communities needs. A community with a coop will see benefits. These include: the creation of stable, local jobs, local ownership and local control of the profit.

Frost explained in the coop scenario, there are worker members who work in the mill and have invested as well as community members who are people from a community who wish to have a stake in the co-op. The board is made up of ten people, most of which are members with one or two non members. He said investment could be as high as $25,000 per worker

He explained those are what they are looking at right now although they still have some things to look over. He said their next step was to attract an investor which Poyry was already doing.

“It’s been shown that when workers are involved in the ownership and worker coops are involved in the ownership, there is a better chance of success,” said Frost.

PART 5: Q&A: PRESENTATION IS EVERYTHING

At Kitimat City Council on July 5th, Councillor Randy Halyk’s Motion to upgrade the sound system of Tamitik was shot down without a seconder. On July 6th, the community of Kitimat came out for a Community Meeting at Riverlodge. It was open mike time and the point made by Halyk was about to be driven home by problems with the Riverlodge sound system.

The first problem is: one of the microphones did not work. When they brought in a second one, it did not work either.

this problem was compounded by the use of a conference call where answers from people in other parts of BC did not come through the sound system clearly and the answers had to be echoed by panellists.

One person at the back of the room comented on how people at the back could not hear the speakers clearly and several left during this part of the presenation.

Peter King was first in line. He wanted to know how people who could not afford $25,000 participate and about the July 15th Deadline. Mary Murphy said she had come up with the $25,000 amount. She said there were people who worked at Eurocan who did not receive a lot of money when the plant closed.

As for the July 15th date, the union was reminded by West Frasier: It had been 7 months. West Frasier would not extend the deadline forever but they were willing to keep the deadline open if they could find an investor.

Bill Volrath wanted to know what the overall value of Euorcan. Murphy stated they could not discuss the numbers but Poyry has gone through the mill and assured them the assets they need are still in place. Volrath also wanted to know what supported viability if West Frasier stated the mill is not viable.

Murphy was enthusiastic about the study but referred the question to the phone. At this point, another problem with the sound system became obvious as the room was blasted with feedback.

It was explained both at this point and later in the meeting the Sack Craft was one of Eurocan’s secondary products but of a grade which was in high demand. They were still receiving orders for it while the mill was being shut down. There were two other mills which made the same grade of sack craft paper. The linerboard machine used more power and equipment then anything else on the line.

Angus McLeod shouted his question over the feedback at the Panel because the microphone was not working. He wanted to know how much was needed to make the mill viable. Murphy said they were still talking over the figures with West Frasier. Murphy estimated 20-40 million dollars, the phone panel was reluctant to provide an estimate.

The next woman wanted to know what kind of money was expected to show seriousness that night and if a payroll deduction plan from other businesses had been considered for people who wish to contribute. Councillor Randy Halyk suggested anywhere between $2,000 and $25,000. He also said the Payroll deduction idea was a good idea.

He said 10 cents would not show commitment nor would $1000. $10,000 was closer. He suggested $25,000 would be good but not everyone could afford it. They were setting up a trust account with envision. Murphy stated the mill would be cash positive and the Harmac model had a worker buy in at $25,000 although they had payment programs. She stated they could not buy a mill if everyone puts $1,000 in.

“This is an investment in your life, and investment in your community and an investment for the Northwest. We are going to have a sustainable, stable forest industry here,” said Murphy.

Halyk said if the community could raise $10,000, it would show the government what the mill means to Kitimat. Councillor Bob Corless, who was one of 6 City Council Members Present (Councillor Mario Feldhoff being away), suggested the tax holiday motion which had been tabled at previous nights Council meeting. He joked about this being away of getting back at West Frasier as they did not like to pay their taxes.

The next question revolved around how many workers and where the workers would come from. The number of workers was suggested to be 225 with opportunity to further investment. Murphy stated they have emails from people who want to come back and they could hire retirees to come back and train the younger generation.

Gerd Gottschling wanted to thank people for coming out. He was concerned about where the government was in all of this. The council was behind the buy out but the government has committed $40,000. He wanted Minister Pat Bell to deal with this issue.

“I think that since he is not here shows me there are more important things for the government then our community which is really hurting,” said Gottschling. The response was the Premier and the Forest Minister were approached but they could not be their because of a Caucus meeting. They were able to send Barry Dobbin. MLA Robin Austin was also in the audience.

Gottschling wanted to know how much the Provincial Government would commit to this endeavour. Dobbin answered the government was interested in seeing forestry in the Northwest.

The next speaker was Paul Chhina whose question was drowned out by feedback. He moved to a different microphone and asked about investing. Murphy stated they would have a meeting the next day to discuss how much investment. She added there were now homes in Kitimat going right up for sale.

Their was a question about paying through RRSPs. The final questioner stated Kitimat pays 13% of the provincial tax and there were no representatives in the government showing concern for the community. He wanted to know if there was a way to invest which was income tax deductible. The answer was there were two was of doing this, one way allows employees to earn a tax credit.

Murphy and Halyk concluded the evening. Halyk acknowledged Councillor Richard McLaren, Council’s other representative. Halyk thanked the dedicated people and thanked Murphy who has worked the hardest. He said the bottom line was buying the mill and it making it go forward.

Murphy thanked the District of Kitimat. She asked Mayor Joanne Monaghan to say a few words. Monaghan stated: “I am very enthused and very pleased with what the group has been doing and I would just like to thank very much, those that are here and those who are not here because you have no idea of the time they have put in. It seemed that every couple of days they were in that room in the district offices and they’d be there for hours and they’re working for you, they’re working for the community and their trying to get something happening and I just want to thank you guys from the bottom of my heart, you are all just really wonderful, trying for our community, working for our community. Thank you.”

Murphy concluded the evening reminding people if they did nothing, no one was going to do it for them. She said she has spent time in Terrace talking about the sawmill.
july 22 report
Comment by mary murphy on 10th October 2010
Thanks to Les for his comments and it is appreciated. the pulp logs (fiber supply) to ensure long viability of the mill was secured. There is a representative from the government on the viability team. pleased understand that involvement from all aspects were secured. This has been an expensive venture for all involved, but important to our community. This goal which was a direction of local 298 members will continue until the last paper machine is sold.
You could be right they may be more, but we will all do our best, success or failure, we will not be dead, but understand that the best shot was attempted.
eurocan.
Comment by les wamough on 22nd July 2010
I just read most of the reports contained and can't believe the junk that is in them. Several places it is stated that 'pulp logs' will supply the mill. That mill has never run on 'pulp logs' ,there never has been a chipper there to turn logs into chips. The key elements to get the mill to run is a constant supply of fiber. Right now no such supply exists. One section of these reports deals with the "log yard" and log contributions to it.

This has been espoused by Minister Bell, experience of the locals say it will never work.

The word constant is the first key to why it wont work in the Eurocan case. Say this log yard is full of logs that are up for bid (as I understand it). Eurocan bids and is successful. In the next round of bidding Eurocan is NOT successful so they run out of fiber and shut down

YOU CANT SHUT A pulp mill down at some whim. The supply of fiber must be constant and guaranteed. That is why WAC Bennetts government invented TFLs (Tree Farm Licenses.). This liberal government changed that and now allows logs to be sold anywhere.
The parent company of Eurocan is not part of the solution to this problem. They closed the mill arbitrarily, never seeking a new partner or a purchaser. WHY? Because they did not want it ever run again.

Now they are saying they need 50 million dollars for old debts, before they will get off the pot.

I wrote Mayor and council of Kitimat the day after the closure announcement advising them to do a FORENSIC audit of the Kitimat works, DON'T believe ANYBODY There is a lot more, but good luck guys, get Eurocan in line or you're all dead.