Nfld. & Labrador

Northern Peninsula forest industry's potential revival hits roadblocks with campaign underway

The company proposing to construct a $20-million pellet plant in Hawkes Bay struggling to find investors and dealing with personnel changes, sources say.

Company proposing pellet plant for Hawkes Bay hindered by 'negativity,' says Gerry Byrne

The latest attempt to revive the forest industry on the Northern Peninsula may have suffered another setback, and the issue came with some political overtones Thursday. (CBC)

The latest attempt to revive the forest industry on the Northern Peninsula may have suffered a setback — with political overtones — due to investment issues, personnel changes and a southward shift in the attentions of the parent company behind the project.

Sources say the company behind the venture, Timberlands International, is struggling to entice international investors to pump money into the project, and that the "tone and tenor" of reaction to the proposal in the region may be a factor.

Sources say Richard Spinks is no longer leading efforts by Timberlands International to establish a biofuel industry on the Northern Peninsula. (Submitted)

There's also word that plans to establish a pellet plant at Hawkes Bay, a town of just over 300 on the western side of the peninsula, are now in limbo. And some key personnel with Timberlands, including Richard Spinks and Tom Hardy, have either left the company or have been reassigned.

What's more, sources say there are suggestions that the parent company of Timberlands, Active Energy Group, is growing increasingly focused on another project in the United States that has enjoyed a "significant level of success."

'I would say it's in limbo'

The developments are worrying for Hawkes Bay Mayor Garcien Plowman, who's been very supportive of a proposal to bring a new industry to the community.

The town council reached a deal to sell 10 hectares of land to Timberlands for $100,000 to construct a plant that would eventually employ up to 30 people. But Plowman has not heard from anyone at the company since January.

I would have to say it's in limbo.- Hawkes Bay Mayor Garcien Plowman

"Well, we haven't heard back from the company officially so I would think it's probably, well … no money had changed hands, so I would have to say it's in limbo," Plowman said.

Over the years, various provincial governments have poured tens of millions of dollars into the Northern Peninsula, primarily in the Roddickton region on the eastern side of the peninsula, in support of various schemes to bolster the forest sector. However, all of those potential projects have failed.

The arrival of a new player last year created hopes that a turnaround was finally on the horizon.

'Use it or lose it'

Active Energy is a U.K.-based company with a local subsidiary, Timberlands. It received two five-year commercial cutting permits in November to harvest up to 100,000 cubic metres of timber annually on the Northern Peninsula. The permits were awarded with strict conditions attached under government's so-called "use it or lose it" policy, which requires the company to harvest 40 per cent of its allocation in the first 30 months.

The company also announced plans to establish a $20-million pellet plant in Hawkes Bay, with the finished product to be exported to Poland.

"This is a great project. We hope it happens. But there is no guarantee," said Plowman.

"I mean, this a venture-funded company trying to raise funds to start this project, so I guess the project all depends on how much funds they can raise."

The forest industry in Roddickton has a long history, but in recent years has seen no movement.

A sawmill in the town has been idle for years, and the paper mill in Corner Brook no longer has an appetite for pulpwood from the peninsula.

Sheila Fitzgerald is currently on leave from her post as mayor of Roddickton, and is the Progressive Conservative candidate in St. Barbe-L'Anse aux Meadows. (Colleen Connors/CBC)

So when Timberlands selected Hawkes Bay as the site for its pellet plant, it caused an uproar on the other side of the peninsula, where local leaders — including Roddickton Mayor Sheila Fitzgerald — expressed disappointment at the decision, and at one point threatened to prevent the removal of timber resources from the peninsula.

There was also criticism of government's decision to allocate so much of the peninsula's forest resource to Timberlands.

Gerry Byrne blames PC candidate

Fitzgerald is now the Progressive Conservative candidate for St. Barbe-L'Anse aux Meadows, a district that includes Roddickton and Hawkes Bay. She was partially blamed Thursday by Corner Brook Liberal candidate Gerry Byrne, who was the minister for land resources before the election call, for scaring away potential investors.

Bryne did not use Fitzgerald's name directly, but the target of his criticism was clear.

Gerry Byrne was, until the election writ dropped earlier in April, the minister of Land Resources, and is the Liberal candidate in the district of Corner Brook for the May 16 provincial election. (CBC)

"There has been some negative social media which we all have witnessed and seen and read over the course of the last several months. And that may have had a negative impact on the company's ability to raise capital," Byrne said.

"There has been some very negative reaction to the announcement of the biofuel plant going into Hawkes Bay from interests outside of Hawkes Bay. It's been very vocal (and) it has been said that there will be no timber whatsoever that will ever be allowed to leave the Northern Peninsula."

Fitzgerald dismissed Byrne's criticism, saying, "If I thought I had that much influence, how come we're not rich already?"

We need strong representation. And I think, if anything, that's the message that's been sent around.- Sheila Fitzgerald

Fitzgerald has since softened her position, saying she's OK with the pellet plant being built in Hawkes Bay, since it will likely lead to the reactivation of the sawmill in Roddickton.

"We're not greedy. We're not asking for all of it," she said.

And Fitzgerald is not worried that her previous criticism will cut into her support in the Hawkes Bay area.

"People know I will not sit back and not say anything. I've sat on my hands long enough. We need strong representation. And I think, if anything, that's the message that's been sent around."

Meanwhile, Byrne has not given up hope that Timberland will find a way to transform its proposal into reality.

"Based on talks, the company is still very interested in doing business," said Byrne.

Attempts to reach anyone at Timberlands or Active Energy were unsuccessful Thursday.

Read more articles from CBC Newfoundland and Labrador

About the Author

Terry Roberts is a journalist with CBC's bureau in St. John's.

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