Abitibi to shut down Kenora mill

Northwestern Ontario’s forestry industry was dealt another major blow yesterday when Abitibi-Consolidated announced both machines at its mill in Kenora will fall silent in October.
But the Montreal-based company did leave the door open to the possibility of bringing the larger of the two machines—capable of churning out 150,000 tonnes of newsprint annually—back into production at a later date.
A press release issued yesterday morning said the less productive of the two units is slated to be permanently closed while the second machine will be “idled for an indefinite period.”
“We are still engaged in discussions with the Ontario government trying to find an innovative plan to help mitigate Kenora’s production costs,” Abitibi president and CEO John Weaver said in the release.
“Assuming a deal is reached, we will look at restructuring the mill under a one-machine scenario,” he noted.
Abitibi-Consolidated also announced yesterday a second-quarter loss of $43 million, or nine cents per share. Last year, the company, which has about 14,000 employees and does business in roughly 70 countries worldwide, recorded a second-quarter loss of $79 million.
When reached yesterday, Ontario NDP leader and Kenora-Rainy River MPP Howard Hampton said unless the McGuinty government is willing to give pulp and paper mills a fair deal on their electricity bills, not only will Kenora’s second machine never be fired up again but other mills will be in trouble, too.
“I’ve talked to Abitibi and the key for them to keep the second paper machine running is affordable electricity,” Hampton said, pointing out the mills here and in Kenora pay about seven cents per kilowatt hour of energy while paper mills in some provinces pay half of that amount.
“The McGuinty government doesn’t understand how important the forestry sector is to Ontario’s economy,” Hampton charged.
“The pulp and paper mills are not asking for a hand-out, they’re simply asking to be treated by the same rules that apply to the automotive sector or the television and movie industry sector.”
While Hampton vowed to continue to lobby McGuinty’s Liberals to pay more attention to the forestry industry and the issues facing the mills in Northwestern Ontario, it may be too little, too late for Kenora, which suffered its first setback when a third paper machine permanently closed in 2001.
Abitibi officials said yesterday their decision to shut down the two remaining machines would result in the loss of about 200 jobs, but Hampton estimated that number to be much higher.
“It’s 400 people out of work,” Hampton sighed. “And when 400 people are out of work, a whole bunch of other people will be behind them because they will not be shopping, they will not be buying new things.
“In fact, a bunch of them will be packing up and leaving Kenora. It will not be pretty,” he warned.
Hampton travelled to Kenora last night to meet with community leaders and mill employees.
Also yesterday, Abitibi-Consolidated announced its mill in Stephenville, Nfld. would be permanently closed, effective in October.