Saturday, August 23, 2014

Kraft mill, #5 machine idled

Resolute Forest Products dropped a bombshell on Fort Frances yesterday with word its kraft mill and #5 paper machine here will be idled indefinitely come month’s end.
The move means 239 employees will be laid off.

Paper machine #7 will continue to operate, with about 200 employees staying on at the mill.
“The markets for these products are challenging and are expected to remain so,” Resolute president and CEO Richard Garneau said in a statement issued mid-afternoon yesterday.
“The kraft mill situation is particularly difficult given Fort Frances’ operating configuration, and the recent decision by a key customer to stop consuming the pulp supplied by Resolute to its mill,” he added.
“Our kraft mill’s drying capacity is limited to about 40 percent of its production capacity, making it impossible to continue operating the mill in a profitable manner,” noted Garneau.
Resolute did say it is exploring alternative product possibilities for its Fort Frances pulp mill, which will be idled in a manner that will protect the equipment.
The idling of #5 paper machine, meanwhile, is driven by a decrease in consumption as well as the high value of the Canadian dollar, the company said.
“We will monitor market conditions closely and work with key stakeholders to explore ways to improve the mill’s cost position,” said Garneau.
The running down of fibre inventories and the orderly shutdown of the kraft mill is expected to be completed by month’s end. Paper machine #5 also will continue to operate until late November.
Resolute pledged yesterday to work with affected employees, all levels of government, and other local authorities on programs “to lessen the impact of the idling.”
Resolute employees affected by this idling also will be considered for job vacancies and opportunities at other company facilities.
In all cases, employees will be treated in accordance with the applicable collective agreements and provincial legislation, the company said.
“I don’t know how it’s going to affect us all yet,” admitted Larry Kellar, president of Communications, Energy and Paperworkers Local 92.
“It’s pretty early in the process here, just finding out today [Tuesday].
“I think they sent out 240 notices,” he added. “I don’t even know—I might be on the list.
“I don’t know.
“Anytime we idle, it’s a scary feeling,” Kellar said. “They’ve idled lots of things, but eventually they’re not idled anymore—they’re shut [down].
“And that’s the scary part about it.
“I know they’re still trying to work on plans, but . . . I don’t know what to say. It’s a tough situation to be put in for everybody,” he lamented.
While some mill workers will wait around to see if the kraft mill and paper machine #5 start up again, many will not. Kellar speculated CEP Local 92 might lose half its members.
“There’s definitely people who are going to leave—even people who are possibly guaranteed work,” he stressed, adding the local mill already has been losing workers in the recent past.
“With something like this, it’s probably going to send more people out west or more people looking [elsewhere].”
Kellar believes it is vital for the mill to find a market for selling kraft. As reported last month, the Boise Inc. paper mill in International Falls stopped regular pulp purchases from the Fort Frances mill.
“Truth be told, if they can’t bounce back from this, this mill will not survive with one machine, not forever,” warned Kellar, adding the paper machines here are smaller than at many other mills.
“Personally, unless they find a solution to the kraft mill, I am not sure whether I’d say there’s much hope because I’d be kinda lying to myself if I said that,” he later noted.
Mayor Roy Avis said a shutdown had been rumoured for some time but the news yesterday was grim nonetheless.
Two Resolute representatives met with him and Fort Frances CAO Mark McCaig yesterday afternoon to personally inform them.
Afterwards, the mayor called an emergency meeting of council to make sure everyone was aware of the announcement.
“You get shocked when the message is delivered but we have been going through this process, off and on, for so long,” the mayor noted.
“Finally, the ball has been hit and we have to catch the ball, and we have to go running and come up with some type of solution to the problem that we’ve got existing,” he stressed, noting council is not taking the news lightly.
“Going forward, we are going to have a good look at our budget and what direction the town is going to go in,” he later added.
Mayor Avis also said if there is a bright side, it’s that the company is doing engineering studies on alternative solutions to the production of paper machine #5.
“The way it was put to me was that if they weren’t doing the engineering studies, and were coming in and doing a full closure rather than an indefinite closure, then we’d know we have nothing to look forward to,” he remarked.
“But right now, we do have a little ray of hope.”
Kenora-Rainy River MPP Sarah Campbell also was dismayed by yesterday’s announcement, but is trying to stay positive.
“This is a very difficult day for Fort Frances and all of Northwestern Ontario, and my thoughts are with the 239 workers and their families who have been affected by this decision,” she said in a press release.
“[But] while we all have reasons to be angered and frustrated by this decision, I believe we should focus our energies on working co-operatively to ensure that the length of this shutdown is minimized,” she added.
“While some factors, such as a declining market and the high Canadian dollar, may be difficult to harness, many factors remain within our control and officials within the company have assured me that they are committed to finding ways to alter their product to meet changing needs and efficiencies that will ensure the long-term viability operation.”
Campbell said Resolute also assured her they are committed to protecting the mill’s assets to ensure they can reopen in the future.
“I am committed to working with Resolute and other stakeholders to ensure the provincial government is doing all that it can to see this operation resume as quickly as possible,” she vowed.
Thunder Bay-Rainy River MP John Rafferty, meanwhile, said yesterday’s announcement of 239 layoffs at the local mill “are devastating for the workers and their families, and are a significant threat to the struggling Northwestern Ontario economy.”
“This news came as a shock today,” Rafferty said. “My heart goes out to the families and constituents who are directly and indirectly affected by these layoffs.
“My staff and I are ready to assist anyone who will be affected by this devastating announcement.”
Rafferty said he spoke with representatives from Resolute early yesterday and was assured the company is committed to helping affected workers during this layoff period.
“We had a frank discussion about the needs of the workers, especially older workers,” he remarked.
“The lines of communication will remain open and we are ready to assist the workers in any way that we can.”
Rafferty echoed his hopes were buoyed somewhat by the fact a Resolute spokesperson told him the company would “ensure that maintenance and support is kept up for the one paper machine and the pulp mill in case it does get ready to go.”
“That’s quite a bit different than what some other mills have done,” he noted. “They were just closed up for the winter and everything gets wrecked.
“That was good to hear from the Resolute people; that they haven’t given up hope that someday the mill will eventually be back at full capacity.”
Rafferty added the public is welcome to contact him through his constituency office here, in Ottawa (1-613-290-0542), or via e-mail at john.rafferty.a1@parl.gc.ca
He also pledged to continue to work on behalf of workers and families in Fort Frances to ensure they are treated fairly.
“I will do my best to convince Resolute that this is a good mill, these are good people, and we need to get back to full capacity as soon as possible,” Rafferty remarked.
But Rafferty had harsh words for the Conservative government, saying that during Question Period recently, Tony Clement, the minister responsible for FedNor, touted the federal government’s support of Northwestern Ontario.
“Almost in the same breath, he pointed out forestry as being one of the really brightest spots for government support,” said Rafferty.
“We end up with 239 layoffs.
“Interesting counterpoint to what’s happening today [Tuesday],” he noted.

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