Weak markets close mill doors

THE DOORS to the Kitwanga sawmill have closed just three months after a flashy July photo-op celebrated its grand opening.

THE DOORS to the Kitwanga sawmill have closed just three months after a flashy July photo-op where BC Premier Christy Clark and jobs minister Pat Bell celebrated its grand opening and a resurgence of forestry jobs.

Forty-five workers lost jobs from the mill directly, and Stikine MLA Doug Donaldson said more dependent jobs were lost resulting from halted economic activity.

It’s a matter that led Donaldson to demand answers in provincial legislature about why Canadian raw logs are being shipped overseas for processing instead of creating secondary jobs in B.C.

“The Premier got the photo opportunity, and the workers got pink slips,” he said in provincial legislature Nov. 1. “That’s this government’s job action plan in action.”

In Kitwanga’s case, a softened Chinese market and high stumpage tax for that region set up a shaky start for the mill in early summer.

Although the Kitwanga mill sold 95 per cent of its lumber to Canada and 5 per cent to China, the Chinese market influences prices here, and the mill’s doors were forced closed October 7 because it was losing money, said mill owner Pacific BioEnergy’s vice president Brad Bennett.

Pacific BioEnergy was also working toward opening a pellet plant using the mill’s wood waste. While there is still a healthy European market for that product, the plant won’t be operational until the sawmill can at least break even, he said.

“Having the sawmill is the key piece of the puzzle,” he said, noting development plans are still underway for the pellet plant. For the sawmill, Pacific BioEnergy is looking into what niche markets for specialty wood products exist to get it back up and running.

But Donaldson doesn’t think it should have come to this.

“When will the Liberals get serious about the problems facing forestry and ensure B.C. logs for B.C. jobs,” he said in legislature Nov. 1.

Clark responded by saying in order to ensure any jobs in forestry, customers are needed.

“Those customers aren’t in abundance south of the border like they once were,” she said, noting the province has worked hard to find new customers overseas. “In some months we have seen more softwood go to China than it has to the United States for the very first time in history.”

Bennett said the ability to export raw logs actually helped the mill because it offset the cost of manufacturing. What did hurt the mill was a combination of weak markets, poor weather which made it harder to access logs, and a lack of available manpower up north in the forestry industry, he said.

Terrace Standard

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