July 29, 2009
NACKAWIC (CNB) - A $10-million working capital loan from the province and a $10-million equity investment by the Aditya Birla Group will protect 300 forest industry jobs at the AV Nackawic mill. Business New Brunswick Minister Victor Boudreau released details of the investments today.
"I am pleased that our government could help this company get working capital credit during these difficult economic times," said Boudreau. "The global credit crunch, combined with a recent downturn in the pulp industry and the strong Canadian dollar, has hit New Brunswick's forest products companies very hard. Our assistance, coupled with the investment by the mill's parent company, the Aditya Birla Group, are important factors to help AV Nackawic Inc. maintain its operations as markets rebound."
The province's $10-million term loan is repayable over the next five years.
AV Nackawic Inc. employs about 300 skilled workers, and has been operating under current management since 2006. The mill recently completed a major upgrade and conversion in order to manufacture dissolving pulp for the growing rayon markets in India and China.
AV Nackawic Inc.'s vice-president and chief operating officer, Frank Slater, said that the government's willingness to provide access to credit is critical to helping the mill operate at current capacity while its markets improve.
"We know we have a growing market for our product, and we will be running flat out for the balance of the year to meet the demand," said Slater. "This working capital will ensure that we can meet our obligations during the next several months while our cash flow improves. We are grateful for this vote of confidence from the province."
Boudreau said that Business New Brunswick has been honouring its commitment to help the province's forest industry survive the market downturn. The department is working with industry, Efficiency NB and NB Power to help mills be more productive and energy efficient.
Recent investments in forestry sector companies have assisted the industry with access to capital and helped to develop co-generation capacity, adding green power to the grid and reducing dependency on fossil fuels.
MEDIA CONTACTS: Deborah Nobes, communications, Business New Brunswick, 506-444-3323; Frank Slater, vice-president and chief operating officer, AV Nackawic, 506-575-3770.