Mill worker has idea where infrastructure portion of loan should be invested

Gary Kean
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Now that more money will soon flow into Corner Brook Pulp and Paper’s operations, Paul Humber would like to see improvements in the flow of pulp stock going to the paper machines.

That’s one area in particular the president of Unifor Local 242, the union representing the mill’s papermakers, thinks needs attention by way of capital expenditures.

One of the top priorities for the $110-million government loan for the mill announced Thursday, according to Humber, should be the plant’s thermo-mechanical pulping (TMP) system. The TMP department is where the pulp that is eventually turned into paper is mixed and cooked before being fed to the massive paper machines.

“The paper machines need money too, but that’s not as critical as stock production,” said Humber, who attended Thursday’s press conference to announce the financial assistance agreement. “The machines are going fairly quick and the stock is having trouble keeping up with the machines, so a lot of the TMPs need upgrades. We need another line of TMPs, really, but I don’t know if that is going to happen or not.”

Daniel Archambault, the executive vice-president of Kruger Inc.’s industrial products division, was also at the announcement, When he was asked about where the money will be spent on capital upgrades, he first said he didn’t want to get into the details of any planned projects without first informing the mill’s employees.

Pressed for what areas in general could use upgrading, he mentioned the TMP department, along with the two paper machines and the mill’s hog fuel boiler. He also said some penstocks at Deer Lake Power need some attention.

Of the $110 million, $85 million will be used to help the company restructure its finances, while the remaining $25 million will go towards capital expenditures. However, the financial restructuring will allow the company to invest around $70 million of its own money in the coming years, meaning the mill can expect to undergo about $95 million in capital upgrades.

The mill began producing newsprint in 1925, but Archambault believes the mill can remain a viable operation for years to come.

“It’s an old mill, but that doesn’t mean it’s falling apart,” he said. “With the agreement, we will be able to continue to invest and improve our operation and improve our cost structure and ensure the sustainability of the asset.”

Part of the company’s financial restructuring involved getting permission from its current and former employees for a five-year extension on the deadline for the company to meet the unfunded liability obligations of its pension fund. In fact, the company was saying two years ago that the extension and new labour agreements with current workers were crucial to the mill’s continued operation.

Gerald Parsons, a retiree who helped spearhead this issue with pensioners, is glad they agreed to the extension in 2012.

“We know that, as long as the mill runs, our pensions are going to be safe,” said Parsons, who also attended the announcement.

He thinks the government has come up with a good deal for the entire community and the regional economy.

“Just look at the term of the loan,” said Parsons, alluding to how the company is set to repay the government loan in 2033. “You can see there’s a good future for the mill now.”

Corner Brook Mayor Charles Pender took the time to go to the mill for the press conference too. While there will be people who are opposed to government dishing out such a significant amount of money to a private company in a troubled industry, Pender said this money supports the mill, its past and present workers, the entire forest industry and the provincial economy in general.

“I don’t know how anybody could complain about those objectives, so I think it is very positive news,” said Pender.

The financial help was accompanied by a power assets and water rights purchase agreement that will see the province purchase Deer Lake Power and the Watson’s Pond power plant should the mill cease operating.

Pender said that security should not be overlooked.

“I think there is going to be a lot of push on (mill owner Joseph Kruger) and his team to make sure this mill survives and works well,” said Pender. “Otherwise, they lose those rights.”

Organizations: TMP department, Unifor Local 242, Kruger Inc.

Geographic location: Corner Brook

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