Unique deal sees smiles for miles as Nanaimo pulp mill is back in business
Workers, management predict a bright future

Robert Barron, Canwest News Service
Published: Friday, October 03, 2008

NANAIMO - Excitement was high at Nanaimo's Harmac pulp mill Thursday as new life was breathed into the idled facility.

Busy mill workers toiled through the day in preparation to produce the first pulp bundles from the mill -- expected late tonight -- since Harmac shut down in May. The former owner, Oregon-based Pope & Talbot, went bankrupt and closed all its saw and pulp mills.

Millwright Kevin Haylett, who has worked at Harmac since 1979, said simply: "It's good to be back."

"I've worked here my whole working life, so this is home to me," he said as he worked on the mill's pulp dryers.

"When the mill went down, we felt that the rug had been pulled out from underneath us because Harmac always produced the best pulp in the world and always made money.

"Harmac is full of exceptional people, and we all pulled together as a team to get the mill up and running again. It's a great day." About 530 employees lost their jobs when Harmac, which has been a prominent employer in the Nanaimo area for more than 60 years and one of the city's top taxpayers, shut down.

After a court process lasting almost two months, Nanaimo Forest Products -- a group of the mill's workers and managers, Williams Lake-based Pioneer Log Homes, the Vancouver-based Sampson Group and Fraser Valley construction company Totzauer Holdings -- bought the mill for $13.2 million in August. Work has been proceeding to get the mill back in operation ever since.

About 200 workers started at 7 a.m. Thursday morning to bring the first of Harmac's three pulp lines into operation, and about 300 workers are expected back at work when the second line begins, likely early in the new year.

There are no plans yet to ramp up a third line, but company officials say further decisions will be made down the road according to demand from the market.

NFP spokesman Levi Sampson said the unique arrangement under which Harmac will operate -- workers invested $25,000 each and will now have an ownership stake in the mill -- is an experiment that all parties are confident will work.

"In my knowledge, there are no other agreements in place like at Harmac. And I'm sure other mills will be looking at us as a template on how to run a pulp mill in today's competitive marketplace," he said.

Sampson said the workers, members of the Pulp, Paper and Woodworkers of Canada, have agreed to the unprecedented terms that there will be no lockouts or work stoppages at Harmac for 11 years.

"Our workers are on board, and they are prepared to make the sacrifices to ensure the mill is a success," he said.

"We realize that it's unique that union members will also be mill owners, but we foresee no problems because we are all heading in the same direction and we don't anticipate any head-butting between workers and management. The workers have two members on our eight-member board, so everyone has a voice."

As for concerns that international pulp prices have peaked and are beginning to decline, Sampson said markets are always fluctuating and going through "ups and downs" but with the workers also as owners, Harmac has the "unique ability to be cost-effective and try things differently."

"This is the most motivated workforce I've ever seen who are willing to weather the bad times when the markets are down, but will have happy days when the markets are good," he said.

Besides, Sampson said Harmac has a five-year contract with a purchaser for 100 per cent of its pulp product, with the bulk of the pulp heading to markets in Asia and Europe, with a small amount heading to the U.S.

"It hasn't been an easy road to get to where we are now and we plan to be around for many years," he said.

"All four of the partners in NFP are committed to making Harmac work and we expect it will be around for future generations." Bruce Martin, a heating and cooling ventilation technician who has worked at Harmac for 12 years, said he was "elated to be back" as he worked on ventilation systems Thursday afternoon.

He said he "never lost hope" that Harmac would reopen, even in the dark days in May.

"We're now partners in Harmac and it's exciting to know that the work I do here matters to myself and the people I work with so I'll be coming to work with a smile on my face every day," Martin said.

Martin said he's "quite happy" with the newly negotiated collective agreement he signed, which gives him about the same wages he was making before the shutdown and three weeks of vacation time a year.

Sampson said Harmac has sufficient wood chips and hog fuel for its operations, thanks to an agreement with Western Forest Products to supply the fibre, and he has no fears that the mill won't have enough of a fibre supply, even at the busiest of times.

"Harmac is a really good news story in the province's forest industry these days," he said.
"We see ourselves as a bright light when so much bad news is coming from the industry."

© The Vancouver Sun 2008