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Proposal for massive Miramichi forestry project discussed with Trevors

Miramichi Leader KRIS MCDAVID

Miramichi (06/19/2014) – Representatives of the provincial government and local forestry officials sat down for the first time to discuss particulars of an ambitious strategy that is currently in development, one that could create hundreds of direct and indirect jobs in the regional sector if realized.

Hal Raper, chief financial officer of Miramichi Lumber Products Inc., company president Danny Anderson and Mike Hill, president of the Miramichi Chamber of Commerce, met with Human Resources Minister Robert Trevors, the Progressive Conservative MLA for Miramichi Centre, at Miramichi City Hall on Monday to talk about the massive project.

“Being a representative of the area, every plan that comes in I always try to look and see where we can be of assistance,” Trevors said in an interview Thursday. “Everybody in that room is just interested in trying to get people back to work.”

Raper, along with Fritz Weirathmueller, a special consultant working with the group behind the plan, revealed initial details to the public during a city council meeting in May.

The venture, if brought to fruition, would mean the creation of five new companies processing different forestry products from high and low-grade wood.

The structure would see a parent company, to be known as Miramichi Fiber Processing, overseeing operations of four subsidiaries – Miramichi Sawmill, Miramichi Pellets, Miramichi Scrimtec and Miramichi Heat and Power.

All four of these entities, according to the group, would ideally be located within the former UPM-Kymmene paper mill property at Curtis Corner. The company would need about $190 million to cover startup costs and, perhaps most importantly, access to 690,000 cubic-metres of wood, including 520,000 cubic-metres of saw logs and 170,000 cubic-metres of biomass.

The former UPM site is currently owned by the province and the group has expressed interest in taking it over in order to make room for all of the new infrastructure that would need to be built.

Raper said his contingent wanted to sit down with Minister Trevors in order to go over some of the finer points of the plan, particularly their concerns over Crown wood supply.

Without a guaranteed wood supply, Raper said the strategy won’t get very far.

“We had a bit of a roundtable – our stumbling block is still the wood allocation,” Raper said. “(The group) all want to know what is the wood allocation, what is the resource, because it’s pretty hard to build and finance a plant if there’s no resource.”

Issues of Crown wood access are now new for Miramichi Lumber. Management of the long-running company, which would be dissolved and reborn under a new name while making up the sawmill component of the venture, have been pressuring the provincial government for more wood for years.

Those efforts have been largely unsuccessful to date, with the company saying a shortage of Crown saw logs has forced it into a temporary production cycle.

Raper said that with people in the industry already expressing interest in backing the proposal, and with so many potential jobs hinging on its success, he’s hoping the government will listen closely and see the benefits.

“We have a company in that was interested in taking all of the engineered wood beams we would make and finding a market for it and we also have had, formally, two expressions of interest to build the power plant and one to build the pellet plant,” Raper said.

“We’ve got a lot of people who are interested in doing different segments but the real catch now is how much wood is available.”

Raper said the group submitted a 120-page business plan to the province roughly two months ago for review. He said they have yet to file a financial plan to the government yet because it needs to have hard data about what it can expect in terms of wood before putting numbers together.

The first phase of the plan, if everything moves ahead, would see the company’s sawmill operations relocated to whichever site is ultimately selected for the project. From there, a pellet plant built to process mill byproducts into value-added product, along with a Scrimtec mill that would manufacture specially engineered beams made out of lower grade pulpwood.

An in-house heat and power plant would be erected as well, providing cheap energy for the operation and potentially having the ability to sell some of it back to the grid.

Trevors said the government is happy to work with the company and help them develop their strategy and get answers to some of the questions they have.

While Trevors didn’t reveal much about the chances the group would be able to gain access to the amount they’re seeking in terms of fibre, he did hint their business plan might require tweaking.

“If they can go up and show me a plan we know can work and they can get the funding to come up and be that partner, I’m going to make sure the wood partnership is going to be there as well,” Trevors said.

“I just want to ensure people that any project that’s in front of us and can create jobs, I take interest in it if I know it’s going to help the Miramichi.”

Hill and the chamber have thrown their support behind the local proposal and touching on the issue Wednesday, Hill said he’s hopeful the province is listening.

Hill said he’s anxious to discuss the future of the Miramichi forestry sector even further with Premier David Alward in the next few weeks. Alward is scheduled to address the chamber as part of its ongoing leadership series on July 4 at the Rodd Miramichi River Hotel.

“I think Robert Trevors at least told us in that meeting he’s going to make another attempt to get the right people in the room,” he said.

“We expect the premier to come here and speak on behalf of the PC party and the government and we want to take advantage of that meeting and sit down and talk with him about things like the wood system and health care.”