Pulp and Paper plant profits in Nova Scotia
Aug. 28, 2013, Point Tupper — Port Hawkesbury Paper LP is turning a profit eight months into its restart after cutting rates to contractors and negotiating new deals. The small independent trucking and harvesting contractors employ about 400 people supplying the mill with pulp wood.
When truckers protested through the Northeastern Pulp Truckers Association, the mill's new owners refused to negotiate with them as a group and waited until they abandoned their boycott of wood deliveries to the facility.
"We have made mistakes along the way," said Ron Stern, owner of the Point Tupper pulp and paper plant, told The Chronicle Herald.
According to Stern, the protest was a "communication problem." Contracts for wood delivery have now been signed with private and Crown lands woods. Some contractors have invested in expensive new harvesting gear, banking on the long-term sustainability of the mill.
The mill's restart meant the return of 300 good-paying jobs at the mill and another 400 in the woods supplying it after a decade of pulp and paper mill shutdowns across North America. Local mills have been unable to compete with low-cost imports.
But Port Hawkesbury Paper has one of the most efficient machines in North America, producing hourly a roll of paper over 100 kilometres long and 9.6 metres wide. It was built for $830 million in 1997, producing higher-value magazine-quality paper.
The cost to operate the machine is high. Stern estimates electricity rates are 30 per cent higher in Nova Scotia than at some of the company's competitors in the United States.
Of the $160 million Port Hawkesbury Paper will spend in Nova Scotia this year, about $65 million of it will be for energy. To combat the expense, the machines that turn wood chips into pulp are only run at night when electricity demands are lower and electricity is less expensive. The mill is also working with educational institutions to come up with more energy efficiency measures to implement.
For more information, go to http://thechronicleherald.ca/business/1150074-paper-plant-turns-profit-page?from=most_read&most_read=1150074.