Minas Basin Pulp and Power to Cease Operations in Nova Scotia

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Minas Basin Pulp and Power Co., Hantsport, Nova Scotia, a producer of recycled paperboard, reports that it will cease operations in December, putting some 135 workers out of work. Last year the company said that it hoped a restructuring of operations and changes to pricing would make the Hantsport operations sustainable. However, the company notified employees this past week that "after several years of challenge, the board of Scotia Investments Ltd. has concluded that it is time to recognize the mill is at the end of its cycle, Long-term sustainability cannot be achieved."

Minas Basin was founded in 1927, producing a single product—groundwood pulp. It added paperboard capacity in 1946. Currently, the mill produces 100% recycled paperboard products, including linerboard and coreboard, and has a production capacity of 100,000 metric tpy. The mill's 110 in. fourdrinier machine operates at 1,500 fpm, producing two-ply lightweight high performance and regular linerboard.

The company cited challenges in the marketplace, competition from plants using newer and more efficient technology, and rising operating costs as key factors in its decision. In a letter to employees, the company said that while 135 people will lose their jobs, more than 40 employees will be moved to other companies within Scotia Investments. Those companies include CKF Inc., a paper plate manufacturer also located in Hantsport, a town of 1,160.

The letter also said that the company would begin working immediately with the remaining employees to find alternative options and support them through this transition and mill closure. It further noted that the company is not seeking any government assistance and would fulfill its employment obligations, including the pension plan.

Robert Patzelt, Scotia Investments' VP of corporate development, said pouring more money into such a small mill just wouldn't make sense. "Additional money from the government would be inadequate to overcome those structural and economic challenges, he said in an interview with the Canadian Press. "In this instance, you would have to build a new mill and it would have to be huge and it would have to be located somewhere else," Patzelt said.

The former NewPage Port Hawkesbury paper mill in Point Tupper, N.S., shut down in September 2011, but resumed operations last month under the new name Port Hawkesbury Paper, with roughly half the workers it once employed, after the provincial government announced a $124.5-million assistance package. In June, Montreal-based Resolute Forest Products announced closure of the Bowater paper mill in Brooklyn, N.S., throwing 320 people out of work. That came despite a $50-million government offer to the company, $23.75 million of which was spent to buy land.