Terrace Bay mill looking to hire
A two-day open house here to recruit employees for AV Terrace Bay more than 100 people last week, including many former Resolute workers.
AV Terrace Bay, which is part of the Aditya Birla Group, India’s first global corporation, is focused on producing pulp products, with the intention of converting the mill to create specialty pulp products (dissolvable grade pulp), which will be shipped to viscose staple fibre plants worldwide to be made into textiles.
“[Aditya Birla Group] is just about to finalize the details of the conversion project. It’s a $250-million project,” noted Gino Leblanc, who has been with the Terrace Bay mill for 33 years and also is a township councillor there.
“In the meantime, we’re producing kraft pulp,” he remarked. “The price of kraft pulp is up right now, probably the highest it’s been in a long time.
“And they are also doing capital projects outside of the dissolving pulp project,” Leblanc added. “We just finished our $5-million mud filter project for the recaust department.
“They’re just about to sign the final papers for a second co-gen. A 25 megawatt co-gen.
“Right now, we’ve got a 20 megawatt,” Leblanc noted. “With the second co-gen, we’ll be 100 [percent] self-sufficient on hydro.”
He also said here’s a lot of capital spending in the works outside of the conversion.
“There’s a mill-wide DCS [digital control system] for the mill to automate everything,” Leblanc explained.
“That’s going to be done prior to the conversion to dissolving pulp.”
He added the mill also will revamp its chip and wood-handling system.
“Dissolving pulp will require 30 percent more fibre for that same ton of pulp, so we need to be able to handle more fibre coming in,” Leblanc stressed.
“The ultimate goal is to make 1,000 tons of dissolving pulp, so obviously we’re going to be using more fibre.”
The Terrace Bay mill has had several owners over the years, starting with Longlac Pulp & Paper Company in the 1940s.
The company later was renamed Kimberly-Clark Forest Products.
In 2005, that company sold the mill to Neenah Paper Inc., which, in turn, sold it to Buchanan Forestry Products in 2006, when the mill was renamed Terrace Bay Pulp Inc.
But in late 2011, Terrace Bay Pulp decided to idle the mill for three months.
It did not restart operations and was put up for sale.
Then in 2012, the Aditya Birla Group came to Terrace Bay looking for a source of fibre for its finishing plants, agreed to purchase the mill, and created the new company AV Terrace Bay Inc. for the operation of the pulp mill.
The paper grade pulp mill restarted in October, 2012, with the company planning to invest more than $250 million into the operation to convert it to produce a dissolving pulp.
Aditya Birla Group is building a textiles plant in Turkey right now and most of the dissolving pulp from AV Terrace Bay likely will go there, noted Leblanc.
The Aditya Birla Group is a $40-billion company with operations in 36 countries. The Terrace Bay mill is considered an “anchor mill” due to its location and the fact is uses residual chips produced by regional sawmills.
Their investment is viewed as a definite boon for the community, bringing stability to the local economy, said Leblanc.
“Everything that they said they would do when they first came to Terrace Bay, as far as ‘Here’s how we’re going to do it,’ they’re making it happen—the investments, the long-term commitments, all of that,” he remarked.
Leblanc said that when a town has a mill, it sometimes is taken for granted. But once it closes, and the town loses 50 percent of its tax base, residents can be left asking, “Where do we go from here?”
“That’s why all of the projects that we’ve done over the last six, seven years were all geared towards, ‘What if the mill disappears? What if doesn’t start back up?’” Leblanc said.
“‘How are we going to keep the people here? How are we going to attract doctors? How are going to attract policemen? How are we going to attract teachers?’
“‘How are we going to keep our community pretty and attractive to get those other needs, those other professionals?’”
Leblanc said Terrace Bay carried out an ambitious plan for growth in 2010-11, including a downtown revitalization plan, a cultural centre project, and a total rebranding based on Lake Superior and the new Terrace Bay Lighthouse attraction that was built.
“All of that was done through 85-90 percent funding from the governments—the province and the feds,” he noted, adding the township’s administrative team is very good at putting projects together and staying on budget.
Leblanc added the municipality also has a strong relationship with AV Terrace Bay. For example, the township and company recently negotiated the reassessment of the mill property.
The mill’s assessed value for 2013 was $23 million. The company filed an appeal with the assessment review board in an attempt to have it valued at $2 million.
But the two sides talked and settled on a value of $15.4 million.
The deal will cost the town $530,000 in annual tax revenue. Terrace Bay also will have to repay the company $600,000.
Leblanc said the negotiations meant “sitting down with the mill and drawing a picture of a 70 percent rollback, and 50 percent rollback, and 40 percent rollback, and determining what part of our community is going to disappear, [which] services are going to disappear.”
“And when we sat down and showed them that, they realized that when we’re trying to recruit 150 people here in the next three years to come to Terrace Bay, are we going to do that by getting rid of our swimming pool and arena, and raising municipal taxes by 20 percent?” noted Leblanc.
“So we came to an agreement on 30 percent [decrease in assessment].
“It’s still $530,000 a year but it’s not a million dollars a year,” he reasoned.
Leblanc noted Terrace Bay changed its user fee system, implemented bag tags for garbage, and has kept a close eye on what other municipalities are charging for services to remain competitive.
The township also is seeking ways to realize synergies with the pulp mill. For example, when the second co-gen plant is built and comes online, there will be extra power available.
As such, perhaps the township will be able to run its water treatment plant on that power instead of paying what it normally does for hydro.
Terrace Bay is located on the north shore of Lake Superior, east of Thunder Bay, on Highway 17. It has a population of about 1,500.
Those who didn’t make it to the career fair here last Thursday and Friday, held at NCDS on Scott Street, can contact AV Terrace Bay at email@example.com