Powell River mayor outlines paper mill conversation

Senior Paper Excellence official highlights commitment to Powell River

While Paper Excellence has announced it will invest more than $13 million in its Port Alberni paper mill, the company remains committed to Powell River, according to mayor Dave Formosa.

Speaking during the public engagement portion of the December 15 committee of the whole meeting, Formosa said following the Port Alberni announcement, he received comments from a number of residents and millworkers who were upset that Port Alberni received an investment and Powell River didn’t get anything. Formosa said he contacted Paper Excellence vice president of paper and packaging Patrick Corriveau and told him some of the issues the mayor was hearing.

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“I told him, from my point of view, it was good news,” said Formosa. “Sure, it didn’t come here, but investing money in the mill in Port Alberni means the company is investing money in pulp and paper. They haven’t done that in how many years? Because the last owners were a hedge fund. These people are actually paper people.”

Residents have been asking why the city has given the mill a tax exemption, said Formosa. He said people have been asking why they should hold out hope for the young workers, he added.

“You wouldn’t believe the number of young people I run into in the community who work in that mill,” said Formosa. “Folks my age are going out the door and the vast majority, I’ll bet you more than half of them, are 40 and under.”

Formosa said in his discussion with Corriveau, it was mentioned that there was no connection between Port Alberni and Powell River.

“It doesn’t mean Powell River will close because they picked Port Alberni or anything in that regard,” said Formosa, adding that the project being funded in Port Alberni is a year-and-a-half-old plan. He said it has been in the process for a long time.

“Finally, Patrick was able to convince the owner to invest this money,” said Formosa. “He said to me that although it has been reported as upgrading to a paper machine, the majority of money is for processes in the mill, not the machine.”

Formosa said Corriveau had stated that one of the issues he is having is, since Paper Excellence bought Catalyst Paper Corporation, and because it is not making the profits it should, the owner has said he can’t keep investing. Formosa added that if the company wants new capital, it is going to have to get it from traditional funding sources and not from the owner, according to Corriveau.

“The way it was put to me is that Patrick has a $250 million plan and he is going to come up with a way of eating the elephant in small bites,” said Formosa. “He is hoping that we will be able to start up our mill in the new year.”

The mayor said he would be having further confidential discussions with Corriveau regarding the Powell River mill.

“He wants me to be in the know and know how hard he’s working, making Powell River viable,” said Formosa, adding that plans for the reopening of the local mill include rolled pulp, where the mill takes mechanical pulp, puts it on the paper machine and creates rolls, and ships it into Asia. Formosa said Corriveau told him the market in China is improving, so that’s good news for Powell River.

The other plan for the Powell River mill, said Formosa, is to create a light interior liner for inside boxes. Formosa said the company is trying to build up orders for the two products and start the mill.

Formosa said one way of talking about the commitment to the Powell River operation is that the mill is costing $2.5 million a month “just to keep it warm and keep it on standby.”

“If they had every intention of mothballing it, he [Corriveau] said that’s a lot of money that could go into the bank account. With more than $25 million a year, they could do all kinds of work with that. They are spending that money to keep the mill on standby so they can get these orders built up and get those products moving, and then try and execute their plan for investment.”

Formosa said Corriveau told him he is committed to Powell River, as is the owner and the owner’s representative in Canada.

“He [Corriveau] said both of them are dedicated to Powell River,” said Formosa. “They know that we believe in them, through the tax revitalization, therefore they believe in us. They want to make sure they do everything they can to get Powell River up and running.”

Formosa said the mill will be running the boilers right through March, giving some cash flow and some work for some of the workers.

Formosa said Corriveau has stated he didn’t take his position with Paper Excellence to run two mills.

“He said he came here to run three mills,” said Formosa, “and Powell River is part and parcel of that.”

 
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