Jim O'Neill Aug 26, 2015
reporter Verified #obituaries

MLPI says saw log allocation cut by DNR

Department of Natural Resources (DNR) has advised Miramichi Lumber Products Inc. (MLPI) that its crown land forests allocation has been converted from 126,488 cubic metres of SFJP saw logs to 142,624 cubic metres of SFJP tree length materials. Tree length materials consist of saw logs, stud wood and pulp.

MLPI has also been advised by DNR that it can expect to find that only approximately 30% of the tree length materials are comprised of saw logs. As a result, MLPI will have an allocation of only approximately 42,787 cubic metres of saw logs on an annual basis from crown l ands forests. This is a substantial reduction from the 126,488 cubic metres of saw logs that the Province agreed would be allocated to MLPI. That agreement with the Province in 2009 was key to the formation of MLPI, to the investments in MLPI made by its shareholders and to the financing made available to MLPI by its bank and by Business New Brunswick.

Danny Anderson, the CEO of MLPI, says “It is unbelievable that this could happen in the face of a formal agreement with the Province and on the heels of a 20% increase in the softwood allowable cut from crown lands forests in 2014”.

Currently, MLPI is not operating because DNR refuses to permit MLPI access to its saw log allocation.

MLPI management continues to make efforts to resolve the outstanding issues with the Province and is willing to meet with Provincial officials at their convenience to find solutions that would be of benefit to all stakeholders, including out of work employees.

“We would welcome an opportunity to engage in meaningful dialogue with the Province, hopefully this will happen in the very near future” says Hal Raper CFO “over 100 jobs are dependent on us resolving our differences”.

Related Press Release -- July 17, 2015

Due to Opportunities New Brunswick (ONB) refusal to allow Miramichi Lumber to repair the mill to its pre fire condition with Miramichi Lumber’s insurance proceeds, the sawmill’s main line may not run this year. The Company is exploring all options to restart the main line as soon as possible. Miramichi Lumber is able to operate its second line (carriage line), employing 40 workers (double shift) in Miramichi and 15 in Boiestown. This is in addition to the 60 workers it had intended to employ in its crown forestry operation. Department of Natural Resources has denied Miramichi Lumber access to crown land to harvest its allocation for 2015-16. Without access to Miramichi Lumber’s crown allocation there is insufficient large saw logs to run its carriage line. The carriage line can produce 50% of the saw mills normal operations, running double shift. No explanation has been received on the reason to deny Miramichi Lumber access to its crown allocation.

Department of Natural Resources prevented Miramichi Lumber from completing its harvest and trucking of crown wood cut before March 31st 2015 for 7 weeks, resulting in the loss of contracts and employees. This clean-up process is normally completed from middle of May to the end of June each year. Miramichi Lumber was not advised by DNR until July 2nd that it could commence the clean-up. The DNR deadline for completing this task is June 30th of each year. It is expected that the clean-up will now take 8-10 weeks, at considerable more cost, as Miramichi Lumber scrambles to find replacement workers and contractors to do the work required.

Miramichi Lumber is concerned that none of the annual million cubic metres (25,000 truckloads) of SFJP saw material on the Miramichi crown licenses will be processed in the Miramichi region. For the record, SFJP saw material processed in Miramichi was less than 5% of the total allowable cut in years 2013 and 2014, despite the statement from the previous Premier “that all wood cut on the Miramichi would be processed on the Miramichi”. It is our opinion the private woodlot owners will pay a very high price for not having local markets for their products and the Miramichi region will lose out on hundreds of manufacturing jobs that would add to our Province’s economic output.

On January 6, 2015 Miramichi Lumber experienced a serious setback from a fire that destroyed its electrical and optimization systems. Due to a shortage of crown saw logs, Miramichi Lumber had suspended operations at the saw mill on December 31, 2014 until end of April. The Miramichi sawmill employed 60 people and had run for 20 weeks in 2014 on saw logs, compared to 17 weeks in 2013. The planer/kiln facility in Boiestown ceased operations in January, putting an additional 15 employees out of work. The woodlands division continued to operate until the spring thaw in mid March.

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