|Abercrombie Point, Nova Scotia, Canada, 24 November 2011 -- The owners of Northern Pulp are considering putting in a bid for the bankrupt Port Hawkesbury mill.
Representatives of Northern Resources Nova Scotia Corporation (NRNS), the parent company of Northern Pulp, and Local 972 of the Communications Energy and Paperworkers Union of Canada (CEP), representing unionized employees of NewPage Port Hawkesbury, concluded a week of preliminary negotiations Wednesday.
The negotiations are part of NRNS’s due diligence in preparing a proposal to acquire and operate the Port Hawkesbury mill.
“These were preliminary discussions, but important to allow the process to move forward,” said Don MacKenzie, CEP Atlantic Region National Representative.
The first phase of discussions wrapped up Wednesday, MacKenzie said, and both parties agreed to maintain the option to resume meeting at a later date.
Both parties also agreed to a media blackout with respect to the nature of discussions and options being considered.
“We had good discussions, and certainly there is an interest in working together to develop a sustainable business model for Port Hawkesbury,” said Ron Buchhorn, chief negotiator for NRNS.
Northern Resources parent company, British Columbia-based Paper Excellence, is one of the final four companies in the bidding process for the assets of the Port Hawkesbury mill, said Don Breen, vice-president of Northern Pulp.
“They’re going through due diligence and asked for the meeting with the union last Thursday, and it went a week,” Breen said.
The union’s contract has expired and some of the discussion involved that.
Like all pulp mills in Canada, NewPage faces challenges with the strong Canadian dollar, but has the added problem of a high cost for energy in its current location.
Breen couldn’t comment on just what the purchase of NewPage would mean for Northern Pulp.
“There would be some opportunities, but we would need to ensure there is a sustainable business model in place,” he said.
The next step is to continue the due diligence process, Breen added, which is likely to go until at least the end of the year, but the dates for that are set by a monitor that’s been appointed to look into selling the assets of the NewPage plant.