Stumble Upon

del.icio.us

Digg

Facebook

Print

Email

speakup

REGINA - Saskatchewan's government said Wednesday it will focus on making the province's forestry industry more competitive in the wake of another plant closure.

Forestry giant Weyerhaeuser (TSX:WYL) announced that it's shutting down operations at its oriented strand board plant in Hudson Bay, largely due to a slump in the U.S. housing market.

The move, which will take effect by early July, affects 170 workers.

"It's no doubt a very difficult announcement for them," Enterprise and Innovation Minister Lyle Stewart told the legislature.

"We will be working, Mr. Speaker, with Weyerhaueser to help facilitate the reopening of that facility or hopefully to continue to keep it open. Failing that we'll help Weyerhaeuser to find new owners to reopen the plant if it comes to an actual closure."

The announcement was the latest blow for Saskatchewan's forestry sector.

In February, Weyerhaeuser announced plans to permanently close its softwood plywood mill in Hudson Bay and the softwood stud mill in Carrot River this spring.

Operations at both of those locations were initially idled in January 2007. At the time, there were 116 people working at Carrot River and 183 at Hudson Bay Plywood - most of whom were laid off.

Hudson Bay Mayor Alvena Rumak notes that just a few years ago there were three mills operating in the town. There won't be any after the OSB plant closes this summer.

"The wood resource is the main industry of this town and its down. Actually with this mill closure it curtails all of the wood industry for the province," said Rumak.

But the Opposition NDP, which raised the issue in the legislature Wednesday, said the government needs to do more to help the industry and communities struggling with mill closures.

"The only offer that's on the table to help that community right now is federal dollars to help the workers there begin working in another industry," said forestry critic Darcy Furber, referring to a new federal fund that aims to help communities and workers suffering economic hardships.

Furber argued restarting the mothballed Prince Albert pulp mill is key.

"It all goes back to the linchpin of the industry, the pulp mill in Prince Albert, not being open and running," said Furber. "Therefore this asset is less useful."

The mill was mothballed in 2006 due to weak paper markets.

Shortly after being elected last fall, the Saskatchewan Party scrapped a memorandum of understanding signed by the previous NDP administration and Domtar (TSX:UFS) that might have seen the facility reopen.

But the agreement included $100 million of taxpayers dollars and Premier Brad Wall has said his government won't risk that money. It's been trying to negotiate another deal.

Stewart told the legislature Wednesday that the government "is not far away from some sort of announcement" regarding the Prince Albert mill. He later clarified his remarks with reporters.

"I just meant to say that negotiations I understand are going very well. We feel positive about it," said Stewart. "Even if negotiations are not successful with Domtar we won't give up on that community. We'll continue until there is something."