There is new life for the Terrace Bay mill.
The Aditya Birla Group is purchasing the mill, which has been idle since December 2011, and plans to invest $250 million to convert the facility to dissolve wood pulp for rayon fibre.
Once fully operational, the facility would employ about 275 people as well as 335 woodland jobs and an estimated 1,300 indirect jobs across Ontario.
“Today is so important to my citizens and to the workers in Terrace Bay because we have never given up. We’ve continued to fight and fight for our mill and try to get it going. Now we’ve attracted a premier investor in the world,” said Terrace Bay Mayor Michael King.
The mill is expected to start up this October, but the conversion will take about two years to complete.
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The Birla Group has plants all over the world in countries like China, Indonesia, Thailand and India. They produce about 2,000 tonnes of viscose staple fibre every day; that number will rise to 3,000 tonnes by 2015.
The first phase of production at the Terrace Bay facility will see 800 tonnes produced per day; in three to four years it should be producing 1,000 tonnes.
The group’s executive president of pulp and fibre Vijay Kaul said they chose the Terrace Bay site for their operations because they need softwood pulp to produce their product and just as importantly the ease of working with the province.
“Everything went on very nicely,” Kaul said, adding although there were professional discussions and differences the process was smooth.
The exact details of the deal won’t be released until all the legal proceedings are complete at the end of the month.
Minister of Natural Resources Michael Gravelle, who made the announcement at the Valhalla Inn Thursday morning, said that includes the details about any government support and the $25 million the province is owed by the former Terrace Bay Pulp Mill, which was owned by the Buchanan Group.
The mill entered CCAA creditor protection on Jan. 25.
Gravelle said they are planning a larger, more formal celebration of the purchase in Terrace Bay for once the purchase is finalized and those details will be provided around that time.
“This is a very, very good investment in terms of the province of Ontario working with a company that is making, a very, very significant investment in the province of Ontario,” said the minister.
The Birla Group is known for not shutting down their facilities during tough economic times and Gravelle said they will provide a long-term sustainable future for the Terrace Bay mill.
“This is great news in terms of the long-term prosperity of the forestry industry and obviously great news in terms of jobs and prosperity in the Terrace Bay-Schreiber region, but in Northwestern Ontario,” he said.
Stability is something King is also welcoming for his community.
“In the last couple of years with the downturn in the forest industry, worldwide recessions, market crashes and the fall of newsprints as well as lumber sales in the U.S., everyone has suffered,” he said.
Attracting a company like the Birla Group, who never shutdown despite all those factors because they have 24 per cent of the world market share, comes as a comfort to King.
“I think everybody knows the bit of a rollercoaster that Terrace Bay has been on along with the rest of the forest industry,” he said. “This should be a huge boost of confidence to us and the entire region.”
The former Terrace Bay Pulp Mill also owed the municipality of Terrace Bay $500,000 in taxes. King said an arrangement has been made with the company and they are continuing to pay those taxes when it’s regularly scheduled for them.
King also said that the company’s non-mill assets like the golf course in Terrace Bay and some waterfront property were separated from the mill through the CCAA process.
He said the community does have interest in some of those properties but because of the CCAA process, they are not in a position to speak of any details about it.
