No Re-start in Sight for Samoa Pulp Mill in Calif.

March 16, 2009 - The Samoa pulp mill that sits on California's northern coast in Eureka may be out of action indefinitely due to a shortage of its primary raw material; woodchips.

The mill's owner, Freshwater Pulp, told the Times-Standard that it now believes that there are not enough wood chips available in the region to supply the mill.

The sharp decline in homebuilding over the past year has forced the lumber industry to either curtail production or permanently close sawmills, which has resulted in a shortage of woodchips.

”I've always said that by May 1 we would know whether there is an adequate chip supply,” said Freshwater Pulp's Bob Simpson. “Well, what I'm telling you today is we know there's not an adequate supply.”

Unless the lumber markets unexpectedly rebound and sawmills begin operating at high levels in 2009 or 2010, it's unlikely the mill will start up again, he said. In that case, Simpson said, the company would pursue plans to convert the facility to a pulp and fine-paper mill, which would produce toilet and tissue paper.

But Simpson said that conversion would take two years and $400 million. Nevertheless, he feels confident the mill will eventually run again.

”We look at it much differently,” Simpson said. “We look at it as not a case of if the pulp mill will run again -- it's a case of when.”

Samoa Acquisition Corp. bought the mill from Evergreen Pulp in early February after the plant was shut down on Oct. 15. That put some 215 employees out of work. Samoa Acquisition, renamed later Freshwater Pulp, at the time expected to fire up the mill within 90 to 180 days. With woodchips in short supply and no end in sight, any plans to re-start the mill are in limbo.

SOURCE: Times-Standard

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