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A senior official at AV Nackawick expects the pulp mill will make money this year. (CBC)

A senior official with AV Nackawic is assuring people that jobs at the pulp mill are safe, despite recent reports that 35 unionized positions are being axed.

"There is no employment uncertainty at Nackawic and we are not laying anyone off," said Frank Slater, the senior vice-president of operations.

Earlier this week, union officials told CBC News 35 people would be losing their jobs by February, 2013.

Slater confirmed the mill is planning to reduce its workforce by 35 positions.

But that will happen over the next three years, through attrition and spending on new automation equipment, he said.

"We have many employees in their 50s and 60s and they're getting ready to retire," he said.

"So as we improve automation in the mill, there will be less need for operators in certain positions, and at that point we'll be able to — when people retire, we won't need to replace them."

Cuts part of contract

The union agreed to job reductions last summer when the company agreed to a contract with $1.6 million worth of improved benefits, said Slater.

"Our employees, after the negotiation, including benefits, earn about $80,000 a year on average. So getting these folks out of there will help reduce our costs by about $1 million, which offsets the increase in costs we incurred by improving health and dental and retirement benefits and that sort of thing for the people who continue to work," he said.

Slater said he expects the mill will make money this year.

AV Nackawic has about 270 unionized employees.

It closed unexpectedly in 2004 and remained shuttered until 2005 when the provincial government gave about $67 million in direct loans and loan guarantees to restart the mill.

In 2008, the provincial government gave the mill another $10 million to upgrade and convert the plant to produce pulp for rayon.

And in 2009, the province gave the company a five-year loan of $10 million to protect 300 jobs.

Last March, the federal government offered Nackawic money out of its $1-billion Pulp and Paper Green Transformation Program.

The federal funding was intended to help the mill reduce greenhouse gas emissions and improve energy efficiency.