Robert Barron: Harmac story like no other

Robert Barron, Daily News
Published: Friday, June 19, 2009

The survival and endurance of Nanaimo's Harmac pulp mill, as it battles through one of the biggest downturns in the nation's forest industry, never ceases to amaze me.

The mill, one of the few coastal pulp mills left standing as others have shut down or severely curtailed production as the international demand for their pulp remains low, discovered Wednesday that it is eligible for more than $70 million from the new federal Green Transformation Program.

The $1-billion program, intended to counteract, at least somewhat, the market damage caused by the approximately $7 billion in black-liquor subsidies being given to American mills, may be one of the answers Harmac has been looking for in its efforts to expand operations from just producing pulp.

After more than 60 years in operation, the environmental cleanup costs at the mill site are estimated to be as high as $50 million, and that's a big stumbling block for Nanaimo Forest Products, the mill's owner, as the company tries to acquire affordable credit from banks to help bankroll new projects at the 500-hectare Duke Point site.

The federal funding, if Harmac is successful in the application process, would be used to upgrade the mill's boilers to create green energy and build an electrical generation plant that will produce up to 100 gigawatts of power from wood waste that will be added to the province's power grid.

I've been covering forestry issues as they pertain to Nanaimo and the mid-Vancouver Island region for years and Harmac has proven to be the one good news story in a sector that has seen mills and forestry-related businesses shut down, workers laid off and an industry in turmoil as it deals with today's market realities.

While Western Forests Products' two sawmills in Nanaimo remain idle until markets improve and Madill Equipment closed last year, tossing hundreds of people out of work with uncertain futures, Harmac has struggled through the economic crisis and even has aspirations of adding a second pulp line to its operations later this year.

Levi Sampson, president of Harmac and a spokesman for NFP, a four-way partnership that includes Harmac's workers and three private partners who bought the mill last summer for $13.2 million after its previous owner, Oregon-based Pope & Talbot, went bankrupt, maintains that Harmac's unique ownership model allows the mill to cut operating costs and work more efficiently. Of course the mill has its detractors, but the mill has been, and continues to be, one of the top taxpayers in Nanaimo even though it provides its own water and fire services.

Harmac has, so far, defied the odds and the predictions of most analysts who said last summer that the mill was doomed to fail.

My hat's off to NFP.