AbitibiBowater’s dam sale questioned

laidoffmillguy says:

LOL, It's a great strategy they learned from Newfoundland expropriation....sell off the Hydro-electric assets FIRST then shut down the mills after. These dams were a source of cheap power that made the mills cost effective, I can't see how this is positive in any way.

3/11/2010 5:23:38 PM

panzerIV says:

The only thing i can see them doing this is if they know they are going to get a co-generation facility. This could just be a cash grab to pay of the debt of this american company. Thenm when the other companies who used these dams before for cheap power would go out of business and they would ahve the monopoly.

3/11/2010 8:55:24 PM

stiffedbybucky says:

Laidoffmillguy: At least they are still running what is the delay with TBPL?? I heard quota meetings were held in Tbay this week and they are going with the three year rolling average. Doesn't look good for BUCKY!

3/11/2010 9:30:02 PM

eddylives says:

Hmmmmm.........
Mabey they are trying to get rid of a headache coming up in the near future with repairs and upgrades...........

3/11/2010 9:48:46 PM

mister xx says:

they are looking to get out of northwestern ontario in the most cost effective way.

3/11/2010 10:47:29 PM

stiffedbybucky says:

It is probably one of the requirements for the company to exit CCAA protection. With NBSK pulp at $900 per ton and the recent idling of a newsprint machine in Thorold (news prices still in the dumper though) they are probably lining up the business units they want to keep. Running core businesses and selling non-core ones. The sawmill venture with FWFN is a money maker even over the last year which saw lumber prices bottom out. Word has it three shifts next year with the additional quota allotment. (Use it or lose it!) Also given the recent FSC forest certification for the Caribou Forest (a requirement for big box stores like Rona and Lowes) they will have the lumber market locked up for the Midwest, a traditional Buchanan area. We'll see what happens for Bucky, but according to the E and Y the court appointed monitor he is trying for unconditional financing....see what happens when you screw the banks over. Apparently he is trying to start Nakina and Longlac but nobody will haul wood for him. Do you blame them!!

3/12/2010 4:29:38 AM

waves says:

Find below, disgruntled speculation only

3/12/2010 6:27:03 AM

Lumberking says:

I don't think Abibowa had any choice in the matter, they are severely in debt. It's the General Motors of the forestry sector. It would make sense to run a third shift at the Tbay sawmill. Abibowa is not looking to expand lumber exports into the US, the are having trouble meeting domestic demands currently, with the closure of several sawmills across the country. The company has a good size of the Canadian lumber market that is not subject to a tariff, therefore will come first over American exports. In my opinion It seems that they want to focus on the pulp and paper markets. Generally these are more stable and provide greater revenue than lumber producing. I see Stiffedbybucky you posted about a rolling average. The correnct term is "Regional Quota Volume" or "RVQ" which uses the reference period from Nov 1/06 to Oct 31/09. The Export Allocation Methodology is a tricky one for Ontario. When a primary lumber manufacturer does not use there quota for a lenth of time, it goes into a base pool. If that company needs that quota once again it will be allocated back unless another eligible company has applied and received new or additional quota prior to the re-filing. As of Jan 1/2010 Ontario elected to export with lower charges but with volume restraints, which is good considering the lack of operations in the province. As for Buchanan, who knows, I'm sure he will run in a smaller capacity. Companies as large as his just don't disappear entirely. I'm sure he will try and keep the mills with the larger attached "SFL's" sustainable forest licences.

3/12/2010 2:46:14 PM