Someone asked about the UPM paper mill in Miramichi which is writing down its production value in the second quarter. Here’s a pertinent quote:
UPM will record an impairment charge of the Magazine Papers’ goodwill and writeoff the remaining carrying value of the Miramichi paper mill’s productionfacilities in the second quarter. The Company’s view of the magazine paperdemand development remains unchanged and it expects good demand for magazinepapers to continue. UPM has carried out the testing of goodwill of the Magazine Papers according toIAS 36. Based on the outcome, UPM will record an impairment charge ofapproximately EUR 350 million from the goodwill.
I don’t know exactly what this means but 350 million Euros is a whole lot of dough.
But what strikes me about this whole situation is that UPM has as its stated goal to be a world leader in biomass gasification . Now, I have no idea if the province of NB has talked with UPM about this but it seems to me if the province had taken my advice about “alignment” when it comes to economic development, they could be jumping all over this with research funding at UNB, a pilot test facility in the Miramichi – whatever. The bottom line is that instead of spending $250 million or whatever they announced a couple of years ago to bail out dying plants in a dying industry, why not make strategic investments in a fast growing industry and get on that bandwagon?
Of course I have no idea specifically about UPM. They may detest New Brunswick – who knows? But if in fact this is just about the high Canadian dollar and other structural problems with the paper industry, I would be in their face talking biomass gasification/biodiesel.