Ottawa

Quebec loans $8M to restart Thurso pulp mill

The Quebec government is lending the owner of the pulp mill in Thurso up to $8 million in an attempt to restart the shuttered plant, which employs more than 300.

273 employees laid off Monday as owner searches for investors

A worker arrives at the Fortress pulp mill in Thurso, Que., on Oct. 8, 2019. Most employees were laid off the previous day. (Jean-Francois Poudrier/Radio-Canada)

The Quebec government is lending the owner of the pulp mill in Thurso up to $8 million in an attempt to restart the shuttered plant, which employs more than 300.

The loan comes one day after Fortress Global Enterprises announced the temporary closure of the mill, 50 kilometres east of Gatineau, Que., blaming the ongoing trade dispute between the U.S.A. and China, as well as the declining price for the mill's cellulose products.

The loan is intended to give the Vancouver-based company some breathing room to find new investors and restart operations by a government-set target date of Nov. 30.

We feel it's possible for the plant to increase its productivity and become profitable.- Economy and Innovation Minister Pierre Fitzgibbon

The company said an estimated 273 of the mill's 323 employees have been laid off, while the remaining 50 will maintain the mill's equipment during the shutdown.

At a news conference at the plant Tuesday morning, Minister of Economy and Innovation Pierre Fitzgibbon said the loan will help Fortress preserve its assets as it charts a new course for the mill.

"It's important for the government to intervene now in order to maximize the changes of restarting operations, of keeping employees working and of reassuring suppliers," Fitzgibbon said  in French. "Fortress plays an important role in the forestry industry in the Outaouais and the Laurentians. We feel it's possible for the plant to increase its productivity and become profitable."

Quebec's Economy and Innovation Minister Pierre Fitzgibbon, left, and Papineau MNA Mathieu Lacombe, right, at the Fortress plant in Thurso on Tuesday. (RDI)

Latest in string of government loans

In a written statement issued Monday explaining the decision to temporarily close the Thurso plant, Fortress CEO Giovanni Iadeluca said the company is allocating resources to allow it to restart operations once there's a significant rebound in the price of dissolving pulp, which is used in the textile industry.

Tuesday's $8-million loan is in addition to a $5-million loan the Quebec government issued to the company in early September to keep the mill operating.

The Thurso plant and its workers have weathered several closures in recent years, including the mothballing of the plant in 2009 as a pulp and paper mill by its previous owner, Fraser Papers.

Thurso Mayor Benoit Lauzon says he's confident the community will come to the support of laid off workers at the Fortress pulp plant. (RDI)

Province 'ready to lend a hand'

When Fortress purchased the facility in 2010 it secured a $102-million loan from the Quebec government to convert the mill to manufacture dissolving pulp, and to build a 24-megawatt co-generation plant. 

However the $175-million project ended up costing $300-million, and in May 2019 the Quebec government agreed to give Fortress until 2022 to start paying back the loan.

It's essential to support workers and their families.- Papineau MNA Mathieu Lacombe

Mathieu Lacombe, MNA for Papineau and the minister responsible for the Outaouais, was also present during Tuesday's news conference.

"It's essential to support workers and their families," said Lacombe in French.

"These are people we rub shoulders with every day. It's important to find the means to get the situation back on track, and we're ready to lend a hand."

'They can't keep losing money'

Thurso Mayor Benoit Lauzon said he doesn't fault Fortress for the shutdown.

"When we see the price [of textiles] declining, I think this is a responsible decision by Fortress for their sustainability," Lauzon said. "They can't keep losing money."

Lauzon said he's confident the plant can resume operations and avoid a permanent closure.

"In a small community like ours the impact is enormous, but I know that residents, our business community and small businesses will rally to support the workers and help get the plant up and running again." 

 

 

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