Harmac hangs in as others cut back
Pulp mill is still working despite tough markets
Robert Barron, Daily News
Published: Thursday, January 22, 2009
Less pulp mills means less competition for Nanaimo's Harmac mill.
Catalyst Paper announced on Tuesday that it intends to curtail operations at its Crofton kraft pulp mill for at least 35 days due to weak markets.
This helps running mills, including Nanaimo's Harmac, by taking competing pulp out of the market place.
Gerry Leeuwen, an industry analyst with Vancouver-based International Wood Markets, said the price of pulp is still dropping fast, and hasn't bottomed out yet.
"Downtime at pulp mills during these times when supply far exceeds the demand is certainly helpful for competing operations like Harmac, but pulp is a worldwide commodity that is produced in numerous other locations across the planet so it's not only the B.C. mills that establish the prices," he said.
Catalyst's decision to keep its Crofton pulp mill temporarily curtailed means the company will have removed a total of 72,000 tonnes of kraft pulp from the marketplace since last year.
However, while the other six coastal pulp operations shut down for about a month over the Christmas season due to slow markets, Harmac remained operating with about 200 employees and the company is not looking at layoffs or curtailments.
Manager Paul Sadler acknowledged the dropping price of pulp is a "real concern" for Harmac.
"There's no doubt these are challenging times, but we anticipate they will eventually get better," he said.
The unique ownership model at Harmac, with the mill's workers, managers and private investors working together in a partnership, has been hailed as the wave of the future of mill ownership on the B.C. coast.
Harmac has a smaller workforce than most pulp mills and virtually no corporate overhead.