Newspaper article The Canadian Press

Strong Dollar, World Competition Blamed for Closing of Nova Scotia Mill

Newspaper article The Canadian Press

Strong Dollar, World Competition Blamed for Closing of Nova Scotia Mill

Article excerpt

World pressures blamed for mill closing


BROOKLYN, N.S. - A Nova Scotia newsprint mill became the latest victim of the global downturn in the pulp and paper industry Friday when its owners announced it would stop production and sell its assets, throwing 320 people out of work.

Montreal-based Resolute Forest Products (TSX:RFP) said the strong Canadian dollar and competition from Europe forced it to put the mill, locally known as Bowater, into an indefinite idle.

The grim news comes only months after the provincial government provided a $50-million assistance package to the mill late last year.

Premier Darrell Dexter said his government tried everything within its power to keep the company in the province, and he blamed currency markets for the factory's demise.

"All of the partners came together to try and give the plant the best possible opportunity for the future. Unfortunately it didn't turn out as we would have wished," he said.

"That doesn't make the attempt to do that in any way invalid."

In December, Dexter announced the province would give the mill a $25-million forgivable loan to keep its two paper machines operating, and to help the company make efficiency improvements and upgrade its power plant.

The government says none of that money has been spent.

Dexter put most of the blame for the plant's demise on the high Canadian dollar and a 30 per cent erosion in the value of the Euro against the dollar.

"The plants in Europe are now able to sell into the world market at a considerable discount," he said.

"We recognize that advantage because it used to be ours. ... The results as anyone can see have been pretty profound."

The company's sawmill in nearby Oakhill and the Brooklyn Power Corp. are also affected by the shutdown. The company said it is looking at the feasibility of selling all of its assets and timberlands that it owns in the province.

Dexter said he is concerned about the possibility the company may sell the land to an overseas company that could ship wood fibre abroad.

However, he said he didn't know if the province would offer to buy the woodlands.

Dexter said the government will look for alternative uses of the idled mill and try to attract new industries to an area beset by high unemployment. …

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