It was one year ago in this column (Oct. 2002) I wrote about the resurrection of the shuttered Skeena Cellulose pulp mill in Prince Rupert, British Columbia. Since then, two much-desired start-up dates have come and gone. So I read with interest an editorial in Western Woodland Magazine (Sept./Oct. 2003) titled "Deep Change or Slow Death." It is an essay of sort written by New Skeena boss Dan Veniez. The piece is a hard-lined verdict on the past, present and future of the Watson Island pulp mill.
It's been about 17 months since Veniez's holding company NWBC Timber and Pulp Ltd. bought the idled mill and related assets for $8 million. During that time there have been deadlines and ultimatums. Debates and yelling matches. Victories and setbacks. And although many hurdles have been vaulted, the rebirth of the pulp mill has swung around to what inevitably will be its savior or doomsayer—money, or lack of it.
In the Prince Rupert Daily News, Veniez admitted that financing the start-up has been a much greater challenge than anticipated. "Skeena's history has earned it a reputation within the industry and capital markets which has become an insurmountable barrier to financing. There's no question that much of the negative perception has been well-earned, but much of it has not, particularly given the work we have put in to fixing the essentials of the company."
According to Veniez, those essentials included rebuilding the management team, restoration of some semblance of "sanity" by forging new labor agreements, radically reducing the size of the organization, and the sale of non-core assets or operations that "we know are structurally incapable of making a profit." As Veniez puts it, "We are changing the basic DNA of the company."
Even after a total metamorphosis of Skeena, banks have been tough to convince that the twice-bankrupt pulp operation could make a profit. But an interesting thing happened a few months ago. The city of Prince Rupert jumped behind the project, with 71% of voters (who cast a ballot) in favor of a proposition that the City invest $20 million in New Skeena. Basically, the $20 million would be used to buy the pulp mill and main forest license, and lease them back to New Skeena in what would amount to a startup loan.
The deal also calls for New Skeena to raise the remaining $30 million by Oct. 7, which Veniez says he can do. But, there is no such thing as a sure thing. So as you read this column, a new twist in this saga may already have taken place.
I liked Dan Veniez's plan last year and still do. His hard work and perseverance has earned him a great deal of respect from a great many people. I hope that when you've finished looking through this issue of PaperAge, deep change has already brought new life to New Skeena.
And Speaking of New
We are proud to announce that Harold Cody has joined our group of editors. Harold, former editorial director and technical editor of Pulp & Paper magazine, has agreed to author a special series of reports on Printing & Writing Papers. Reports in each issue will provide up-to-date statistics on current and projected production, capacity, demand, exports, and imports for printing and writing grades from premium coated freesheets through the medium and lightweight coated and uncoated grades, groundwood specialties, and newsprint.
