Miramichi (02/03/2012) – Premier David Alward told the crowd the province will contribute $15.3 million toward the project.
A mill in Miramichi will re-open later this fall and reach full operation by the spring of 2013, officials confirmed on Friday.
The provincial and federal governments will spend more than $17 million to help with the startup.
The mill is expected to make about $60 million a year and bring more than 100 jobs to the northern community, officials said during a news conference.
Additional jobs are expected to be created in the wood yards and in harvesting and wood delivery operations.
The former Weyerhaeuser mill, now owned by Quebec’s Arbec Forest Products, has been shut down for five years.
The provincial government is contributing $15.3 million to the project, said Premier David Alward.
“Forest-product manufacturing is a major focus of our government’s plan to help communities grow and create new jobs throughout New Brunswick,” he said.
The financial package includes a $7 million loan guarantee, a $5.6 million term loan, a $1.5 million payroll rebate, and a $1.2 million contribution for capital expenditures and startup costs, said Alward.
In addition, under the Crown wood allocation agreement, Arbec will be able to harvest about 277,000 cubic metres of mixed hardwood pulpwood and softwood pulpwood, said Natural Resources Minister Bruce Northrup.
If more Crown land becomes available, the mill will be given priority, but at least half of the mill’s wood supply will come from private lots, said Northrup.
“Our government wants to see more private wood being utilized in the province,” Northrup said. “We are pleased that Arbec Forest Products is committed to purchasing a significant amount of wood from private woodlot owners in the Miramichi.”
Minister of State for ACAO Bernard Valcourt said the project will create jobs and wealth for the region. Meanwhile, the federal government is providing $2 million in what’s being called a “repayable contribution” for necessary upgrades.
“The Government of Canada’s central priority is the health of our economy, jobs and growth for Canadians,” said Bernard Valcourt, Minister of State for the Atlantic Canada Opportunities Agency (ACOA) and for La Francophonie.
“This project will bring significant economic benefits to this region, and will help create jobs and wealth for the great Miramichi area,” he said.
Arbec, which bought the mill from Weyerhaeuser Co. for $31 million last month, is undertaking a repair program, mill maintenance and equipment startup, said Tony Meti, chairman of the board.
The mill will make oriented strand board for home construction like it used to, but the goal is to see about 30 per cent of the output head overseas, he said.
Arbec’s other mill in Quebec currently sends about 30 per cent of its output overseas, he said.
The closure in 2007 put about 150 people out of work. At the time, Weyerhaeuser officials blamed a decreased demand for its products.
The mill sent almost all of its products to the United States, but with the languishing housing market, there was less call for building materials.
Arbec had been the first company to go public with its intention to buy the mill four years ago, but the deal fell through in 2009.
Weyerhaeser was planning to decommision the mill if it couldn’t find a buyer.