Merritt mourns mill closure

By James Peters
September 23, 2016 - 9:54am Updated: September 23, 2016 - 5:15pm

KAMLOOPS — A spokesman for Tolko says the decision to shutter its Nicola Valley sawmill this December is purely based on timber supply.

The closure, announced yesterday, will see 203 Merritt-area employees lose their jobs.

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Tolko's Senior General Manager of Lumber, Troy Connolly, says there simply isn't enough fibre to keep all six of the company's southern Interior plants going.

"We never enter into a decision like this lightly. Recent reductions in the annual allowable cut (AAC) as the result of the conclusion of pine beetle harvest have impacted the Merritt and Kamloops timber supply areas (TSA). Based on that, it became clear that there is not enough fibre to support all of our existing operations in the southern Interior."

"In the Merritt TSA, the reduction in AAC was 900,000 cubic metres in 2016 over 2010. The Kamloops AAC was reduced by 1.7 million cubic metres which in total is going to result in capacity coming out."

Connolly notes while a reduction in AAC was always in the cards, the company couldn't anticipate the size of the reduction and how it would affect the business' bottom line.

"It was anticipated that the AACs would come down. We didn't know how much. As we finalized the degree that they came down, we had to reconcile what our operating footprint needed to look like in the southern Interior as a result of those reductions."

Connolly says the closure of the Nicola Valley plant keeps the rest of the company healthy.

"There are no plans for any operating changes in any of our other southern Interior mills. This change really stabilizes our southern Interior operations."

The final day of operations for the mill will be December 16.

Connolly says he's aware that closing the plant just before the holidays may be viewed as insensitive, but it had to be done at this time.

"There's never a good time for a decision like this. When we look at the timing, we were at the point in the business where we had to make the decision, and we needed to make the decision in such a way that gave our employees time to plan. So it's unfortunate timing, certainly. If we could pick easily, we would try to avoid these dates, but at the end of the day, there's really no good time to make a decision like this."

"All employees are going to be offered a severance package that we've negotiated with the local union. We're certainly going to honour that severance package and make sure that our employees are looked after. In between now and then, we're going to look at what transition opportunities exist for people."

"This decision isn't a result of their performance. This is a decision that's purely driven by fibre. And I know it's difficult for people to understand that and it's a difficult time for them and their families, but certainly it isn't driven by them."

Tolko announced last month it would close its pulp mill in The Pas, Manitoba, throwing 332 employees out of work.

But Connolly says the two decisions are not related.

"The two mills are very different, in different industries. One is in paper and one is in lumber. Very different geographies, markets, and other challenges. The Manitoba decision was a financial decision. If you look at the Merritt decision, it's really a fibre decision. Really entirely different circumstance, just coincidental timing."

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