Catalyst and Powell River mayor address market challenges

Paper corporation reacts to new tariff; Formosa meets with Chinese paper company executives

In an internal memo sent to its Canadian and American employees on March 29, Catalyst Paper Corporation president and chief executive officer Ned Dwyer stated that a new United States Department of Commerce anti-dumping duty is a “critical challenge to our company.”

The memo contained information about how the company is addressing the challenges, including growing offshore markets, closely working with federal and provincial governments, and actively lobbying the United States government.  

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A 22.16 per cent duty on most of Catalyst’s uncoated groundwood paper, on top of a 6.09 per cent duty announced in January, “will hurt the market as well as manufacturers,” stated Dwyer.

The CEO added that the company’s BC mills, including Powell River, are also dealing with elevated fibre costs, supply challenges and increasing energy costs.

Meanwhile, while on a School District 47-sponsored trip to China, his fifth since becoming City of Powell River mayor, Dave Formosa took time to meet with representatives of the fourth largest paper company in China, Henan Yinge Industrial Investments.

Formosa said he did not attend as an agent of Catalyst Paper Corporation, but as mayor of a community facing crisis.

As part of those meetings, Formosa said there were discussions about the potential of a Chinese company buying surplus thermo-mechanical pulp produced at the Powell River mill and exporting it to China.

“We worked on relationship building with this company in China,” said Formosa. “Catalyst and the company are making arrangements to meet in the next two or three weeks to discuss the possibility of taking production off of our machines and taking the product into China.”

It is  the first positive news to come in the aftermath of Formosa declaring the mill being at risk prior to his trip to China.

Worry over Catalyst’s future in Powell River is shared at every level of government.

Since the duty was imposed, the federal government has been conspicuously silent, and North Island-Powell River MLA Rachel Blaney is concerned.

In a teleconference held on March 28 about the current parliamentary session, Blaney said she is not seeing as much action from the Liberal government as the NDP would like.

“Anytime any business is saddled with a huge tariff like that, of course there are going to be significant concerns,” said Blaney.

Groundwood paper products used in newspapers, directories, flyers, catalogues and books account for 60 per cent of production at Powell River’s mill.

If the United States’ position holds up and the duties stand, the mill stands to lose approximately $6 million per month.

The last response regarding the newsprint trade war from federal natural resources minister Jim Carr’s office was issued on March 28.

In the media release, the minister’s director of communications Laurel Munroe stated that some federal supports put in place for the softwood lumber industry when it was hit with a tariff by the United States in 2017 would be extended to companies and workers affected by this latest anti-dumping duty on uncoated groundwood paper.

“We have made available $867 million through the Softwood Lumber Action Plan‎ to support forest workers across Canada,” stated Munroe. “Many of these supports, including loans and loan guarantees, and market and product diversification funding, are available to companies affected by the uncoated groundwood duties.”

There is also a work-sharing program in the softwood lumber plan that’s available to supplement Employment Insurance benefits for eligible workers and programs to help transition workers to new jobs.

The Powell River mill employs approximately 450 people with an estimated payroll of $40 million.

Copyright © Powell River Peak

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