Monday, August 02, 2010

Eurocan Community meeting

Published in the Kitimat Northern Sentinel, July 14, 2010.
A standing room crowd learned how the Eurocan paper mill could be reopened at the community hall at Riverlodge Recreation Centre in Kitimat July 6.
The CEP, Viability Group and BC Co-operative Association informed the gathering they had a viable economic case based on a March 2010 consulting report from Pöyry Forest Industry Consulting.
Pöyry reports the mill can operate profitably producing high quality sack kraft on a single machine, "On this basis, a single paper machine configuration can be economically viable at Eurocan."
The Viability Group proposes a co-operative be formed to run the mill, with citizens of Kitimat also investing in the newly formed corporation.
An email sent after the meeting provided details, " The viability group has developed a coop structure to start 'Northwest Pulp and Paper'.
"Boards of Directors have been established for the three month period.
"Once the mill is ready to start up, a board of directors will have to be voted into these positions by members."
The email went on to detail the share structure.
  • each share will be $5000.00 In order to vote you must hold a share.
  • You must hold two shares in order to be a community share holder.
  • You must hold 5 shares in order to have a workers share, and applications must be approved by the board.
During the meeting at Riverlodge, it was also made clear a further substatial investor would be required before West Fraser would entertain selling.
"West Fraser would want the new proponent to take all the liabilities. And they could be the multi-millions of dollars, certainly $50 million plus.
"They want a proponent that would be substantial enough to at least be able to negotiate that with."
West Fraser also expects a non-refundable deposit by July 15 or they will start to decommission the mill.
Asked how much West Fraser expected for a deposit before the looming deadline, Murphy answered via email, "They said substantial? I didn’t ask…I don’t care!! They need to work with us, not against us, it's in their best interest."
The consultant's report indicates a decreasing demand for sack kraft since 2004, "sack kraft has has long been a declining market in North America, declining at a rate of approximately 5% per year between 2004 and 2007".
Via telephone Pöyry explained, "the sack kraft produced at Eurocan is high quality, called extensible sack kraft."
He explained further, "extensible is the premium, it's the stuff that stretches when put under load, and it's used for high demand applications like cement bags.
"There's only two other producers in North America."
Eurocan closed in Jan 2010 after forty years of operation, with 535 people losing their jobs.
For people willing to make a financial commitment to the Eurocan restart, Envision Financial has a trust account set up at their Kitimat branch.
Related Links
Kitimat Northern Sentinel
Pöyry Forest Industry Consulting
CEP Local 298
BC Co-operative Association

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