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Terrance Bay to Switch to Dissolving Pulp Production by 2016

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AV Terrace Bay Inc, Terrace Bay., Ont., Canada, reports that its resurrected pulp mill at Terrace Bay plans to switch to dissolving pulp production by 2016. Preliminary planning for the switch is to begin in the next few weeks, AV Terrace Bay CEO Giovanni Iadeluca said this past week following the announcement of a new fiber-supply agreement with nearby Pays Plat First Nation, according to a report by the local Chronicle-Journal newspaper.

The three-year agreement sets the terms for a Pays Plat company to supply the mill with wood logged from southern portions of the large Kenogami Crown forest, the pulp plant's traditional basket of softwood.

The agreement "will promote the economic development of our community and enhance the job opportunities within the communities, including practical on the job training," Pays Plat Chief Xavier Thompson said in a news release.

The mill's dissolving pulp production will be used in-house by its parent company, India-based multinational Aditya Birla Group, which has a large textile division. In the meantime, Iadeluca said, the refurbished Terrace Bay mill will continue to sell traditional kraft pulp to markets in North America, Asia, and Europe. The plant makes about 1,000 metric tpd of pulp.

About $25 million worth of repairs have been made at the mill since the Birla Group acquired it nearly a year ago from an insolvent Buchanan Group company. The mill's workforce of 350 "won't change considerably" after it begins producing the new product, said Iadeluca.

Pays Plat is one of half a dozen First Nations suppliers of wood to the mill, which requires about 2,000 metric tons of raw fiber daily.

An anticipated downward cycle in the price of pulp has been factored into the mill's business plan and the operation shouldn't be adversely impacted if the price goes down, Iadeluca added. Price reductions did negatively impact the plant when it was run by the Buchanan Group, which was forced to shut down the operation twice in the five years that it owned it.


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