N.B. pulp mill reopens amid pressure from loonie and world markets
NACKAWIC, N.B. (CP) –
The huge A.V. Nackawic pulp mill in New Brunswick has officially reopened, but mill owners say they may need more government help to cope with the rising Canadian dollar.
The mill closed suddenly in September 2004 when the former owners declared bankruptcy.It reopened in January of this year with a reduced workforce of 280 employees under the ownership of the Aditya Birla Group and Tembec Inc. (TSX:TBC).
Shailendra Jain of Aditya Birla says the Canadian dollar has increased by 11 per cent since the decision to buy the mill, while costs have remained the same.
He says unless government can provide help such as more wood allocation, or lower wood prices, export profits will be cut by close to $8 million per year.
Tory Premier Bernard Lord says government has already provided loans, and reduced wood prices by 25 per cent this year, but is discussing other requests from the company.
You’ll recall that the concessions already made to the firm will likely cost the government millions. Now they may want millions more. They are expecting profits to be cut by $8 million per year? That’s $28,571.43 per employee per year. No government in their right mind would subsidize this company by this amount on top of the millions already invested.