Repap outlines plans for mill purchase

Sam Odrowski

Repap Resources Group vice-president Sean Twomey outlined its plans for the idled pulp and paper mill in Fort Frances to delegates attending the Rainy River District Municipal Association’s annual general meeting Saturday in Stratton.
He said they hope to purchase the mill this year and re-open operations 90 days afterwards, at which point they will begin processing packaging paper used in animal feed and cement bags.
“We want to refocus the mill,” Twomey said during his presentation to the RRDMA.
“The mill has typically been producing printing and writing paper, and those two papers have been declining as the internet moves forward and there’s less to print,” he noted.
But Twomey said packaging papers are on an upswing.
“With packaging [paper], it gives us an opportunity to sell a growing product,” he remarked.
“It’s the key way we’re going to be successful in minimizing our costs [and] maximizing our results.”
If an agreement is reached with Resolute Forest Products, the mill’s current owner, Repap intends to spend $71 million (U.S.) to get the mill re-opened, at which time 330 jobs will be created there while an additional 342 forestry-related jobs would come to the district.
While 50-60 percent of former mill employees remain in the Fort Frances area, Repap will look at ways of hiring younger skilled workers to help the mill’s long-term sustainability.
“If we rehire the people from the old mill, they’re generally in their 50s and 60s and their horizons are more limited,” Twomey explained.
“So to generate the next generations of employees, we need a close working relationships with the trade schools in the area,” he stressed.
The mill presently is in pretty good shape despite being closed for almost five years, Twomey added.
If the mill is purchased, he said kraft and groundwood operations would be restarted, along with two of the three paper machines.
Twomey also said he would relocate to Fort Frances to lead the organization following the purchase of the mill. Similarly, administrative and support staff all would be located in the district, as well.
“Decisions have to be made locally,” he stressed.
“The only people we’re going to have in a distant location are going to be a couple of salespeople who will be in New York and the Montreal area.”
The business, meanwhile, has to be viable long-term in order for Repap to be successful, and Twomey is confident the mill here can do just that.
The need for a newly-opened mill would be 1.045 million cubic metres of softwood fibre and a flow of recycled cardboard to add to their product.
To reach an agreement, however, Twomey said Repap needs some information from Resolute to ensure they have all their affairs in order.
“We’ve asked Resolute for specific pieces of information and they have been somewhat reluctant to provide them,” he noted.
“We’ve looked for public record information to ensure we can make a firm and sound decisions.”
Repap has asked for a list of assets, Environmental Phase 1 Report, financial and operational reports for the 24-month period before the mill’s closure, and a list on the status of permits.
One of the key benefits to Resolute if a deal is negotiated is avoiding remediation costs.
“We think that the cost of remediation is high based on looking around at other similar mills across Canada,” Twomey said.
During his presentation, he asked for any assistance from any level of government in finding the above-mentioned pieces of information.
In the near future, Twomey said they must negotiate a deal that works for both Repap and Resolute.
“We need to find an agreement that will move us forward and let both companies benefit,” he stressed.
“I’m honestly certain that we can do that.”