Business New Brunswick

Government supports Plaster Rock mill, maintaining 175 jobs in Victoria County (09/12/03)

NB 1918

Dec 3, 2009

PLASTER ROCK (CNB) - The provincial government has helped safeguard the jobs of 175 mill workers in Plaster Rock with a commercial loan to refurbish the community's Fraser Papers Inc. lumbermill.

The official reopening of the mill was attended by Premier Shawn Graham; Peter Gordon, chief executive officer, Fraser Papers Inc.; Plaster Rock Mayor Judy St. Peter; Victoria-Tobique MLA Larry Kennedy; and mill employees.

"I am enormously proud of the 175 workers who are back at on the job, providing for their families, supporting local businesses and helping to lead New Brunswick forward on the journey to self-sufficiency," said Graham. "The past few years have been very difficult for the people of Plaster Rock when the mill's future was in question. I am very proud that our investment will bring the mill back online today, and our plans for lower taxes and lower power rates will protect against other closures down the road."

Graham spent the morning touring the mill and meeting with employees before proceeding to the Plaster Rock Welcome Centre, where he addressed mill workers and mill suppliers.

"We are very grateful for government's support for this upgrade, which has made our mill more efficient, more productive and more environmentally sound," said Gordon. "We are also looking forward to the proposed plan to lower our power rates in New Brunswick. The plan to sell NB Power will lower energy costs at the Plaster Rock mill by approximately 30 per cent annually, representing savings of more than $400,000. We will reinvest that money in this facility and protect the future of our workforce."

In June 2008, the provincial government approved a repayable loan of up to $40 million to Fraser Papers Inc. to improve energy efficiency, increase processing capacity, upgrade technology and improve environmental performance.

The loan enabled Fraser Papers Inc. to begin a $17.6-million upgrade to the mill, including a new boiler, a new kiln and improvements to its sawline.

As the upgrade neared completion in June 2009, Fraser Papers Inc. was forced to seek protection from its creditors under the federal Companies' Creditors Arrangement Act.

The provincial government then renegotiated the terms of the original loan, agreeing to advance Fraser Papers Inc. $9 million to finish the upgrade, bringing the total secured loan amounting to $35.7 million.

The mill reopened after a nine-month shutdown on Nov. 16. The mill, operating in Plaster Rock since 1906, has a payroll of about $11 million.

"We wanted to finish the job on this mill, ensuring the workers of this community would have a viable industry going forward, independent of who owned it," said Graham. "We are proud to have joined the employees of Fraser Papers Inc. on this important project, and I am confident in their dedication to this province and to their New Brunswick workforce."

09/12/03

MEDIA CONTACTS: Deborah Nobes, communications, Business New Brunswick, 506-444-3323, deborah.nobes@gnb.ca; Peter Gordon, chief executive officer, Fraser Papers Inc., 416-359-8614.

09/12/03