Province Invests in Forestry Business, Helps Maintain 650 Jobs

One of Nova Scotia's largest forestry businesses is getting a loan to help sustain its operations and sustain more than 650 forestry jobs in northeastern Nova Scotia.

Tourism, Culture and Heritage Minister Bill Dooks, on behalf of Economic and Rural Development Minister Murray Scott, announced today, March 26, a $15 million interest-bearing loan for Northern Pulp through the Industrial Expansion Fund.

"This loan will enable operations to continue at the mill, which has been a critical asset to the northern Nova Scotia economy for more than 40 years," said Mr. Dooks. "The company has a strong business case. It has reduced its operating costs by millions of dollars through solid management and innovative thinking.

"More than 1,200 Nova Scotians rely on the mill for employment either directly or indirectly. This is an investment that makes good sense."

The Pictou mill employs about 250 people and 400 direct contractors. It also creates between 600 and 800 jobs indirectly. Each year the mill manufactures about 270,000 metric tonnes of northern bleached softwood kraft pulp, a raw material for manufacturing tissue and coated papers for writing and printing. Bleached kraft pulp is one of the few forest product groups that has been a bright spot over the last several years in an industry hit hard by declining demand.

"The province's support of Northern Pulp is timely, beneficial and very welcome. It comes as Northern Pulp and our competitors are confronted with an unprecedented decline in customer demand and pricing for pulp," said Wayne Gosse, chief operating officer. "To remain competitive, we are continuing to drive our production costs down to the lowest possible level.

"While we continue to face challenges, we believe Northern Pulp is well-positioned to compete long term in the global pulp market."

Northern Pulp Nova Scotia Corporation was created in June 2008 following the sale of the former Neenah Paper pulp mill at Abercrombie Point, Pictou Co., to the management team at the mill and partners Atlas Holdings LLC and Blue Wolf Capital Management. The mill was built by Scott Maritimes in 1967. It became part of the Neenah Paper Company in 2004 when Kimberly Clark sold a number of mills in Canada and the USA.

As a result of the world-wide economic and credit crisis, successful companies operating in Nova Scotia are experiencing challenges accessing capital from banks. With the Industrial Expansion Fund, the government of Nova Scotia is able to provide access to capital and help protect jobs and support businesses to be more competitive and sustainable.