Business New Brunswick

Government supports productivity improvements at two northern sawmills (09/02/03)

NB 103

Feb. 3, 2009

SAINT-LÉONARD (CNB) - The provincial government has helped secure 520 forestry jobs in northern New Brunswick by supporting upgrades at sawmills in Saint-Léonard and Kedgwick. Premier Shawn Graham and Business New Brunswick Minister Greg Byrne made the announcement today.

"We are proud to support these sawmills as they help provide for a brighter future for their surrounding communities," said Graham. "We believe the forest industry is a growth sector, and we are working hard to strengthen the industry by helping these mills be more productive and more competitive in the global marketplace."

The government is providing repayable, interest-bearing loans to Irving-owned sawmills in Saint-Léonard and Kedgwick. The Saint-Léonard sawmill will receive a term loan totalling $4 million to assist with new planer and grading technology. These improvements will increase the production of high-value lumber products for leading North American retailers.

The upgrade will also help secure about 170 skilled jobs at the mill as well as more than 300 jobs in the woodlands operations that supply wood to Saint-Léonard and Kedgwick.

The Saint-Léonard mill, which has produced softwood lumber since 1987, is among the largest and most technologically advanced integrated sawmills east of the Rocky Mountains. The sawmill is part of an integrated New Brunswick forest products value chain and is a key source of chips, bark and/or lumber to Fraser Papers, AV Cell and North American Forest Products.

The Kedgwick sawmill is undergoing a complete modernization as a result of a $10 million repayable term loan to allow for construction of a new log-handling and sorting area as well as new equipment to improve productivity. The loan will be repaid over 10 years and help maintain at least 50 jobs at the mill and secure other, related forestry jobs.

Byrne said these loans are the latest examples of how the government has been helping the forest industry be more productive and more competitive, especially while adopting green technologies.

"We are happy to participate in these significant investments in the future of forestry," he added. "Strategic partnerships such as these will help build a sustainable, economically viable forest industry, which will help lead us forward on the path to self-sufficiency."

Graham and Byrne were joined by employees of both sawmills as well as Jim Irving, president of J.D. Irving Ltd., and the leadership teams for the company's northern New Brunswick woodlands and sawmill operations.

"The province's support through repayable loans will improve productivity at both of these mills," said Irving. "We appreciate the Premier's vote of confidence in the skill of our workforce in northern New Brunswick. The construction and installation of new technology means about $10 million in goods and services purchased from New Brunswick businesses."

The Kedgwick mill opened in the 1970s and has been owned by J.D. Irving, Ltd. since 2004. This investment represents the biggest improvement at the mill to date.

"This investment will help secure well-paying jobs at these two mills and strengthen their ability to compete as we emerge from the current economic challenges," Irving said. "These fully repayable loans with market-based interest rates are made so as to conform with our obligations under the softwood lumber agreement."

Business New Brunswick is also working with industry, Efficiency NB and NB Power to help mills be more energy efficient.

Recent investments in forestry sector companies have included: Irving Paper, J.D. Irving Ltd.'s Deersdale sawmill and the Grand Lake Timber mill, Groupe Savoie, Flakeboard and Future Alternative Wood Products. These investments have been helping the industry develop co-generation capacity, adding green power to the power grid and reducing dependency on fossil fuels.

Government also recently provided secured loans totalling $40 million to Fraser Paper Inc., helping to pay for projects that improved energy efficiency, increased capacity, upgraded technology and enhanced environmental performance.

09/02/03

MEDIA CONTACTS: Deborah Nobes, communications, Business New Brunswick, 506-444-3323, e-mail, deborah.nobes@gnb.ca; Mary Keith, J.D. Irving Ltd., 506-632-5122, e-mail, keith.mary@jdirving.com.

09/02/03