Mill would give boost to woodlot owners, expert says

McDavid, Kris. Miramichi Leader; Miramichi, N.B. [Miramichi, N.B]13 Aug 2018: A.1.

Private woodlot owners in the Miramichi region are reacting optimistically to word that a New Brunswick forestry company is nearly ready to forge ahead with establishing the area’s first pellet mill.

Jean–Guy Comeau, the vice-president of the New Brunswick Federation of Woodlot Owners and a longtime private woodlot owner on the Miramichi, has seen a handful of plans from various proponents that had been looking to build a pellet plant here come and go over the years.

But the one being proposed by Ross Creelman and his Northern Energy Solutions group, he said, feels somewhat different.

And having that steady destination for their low-grade cuts, which are essential in the process of manufacturing wood pellets, would make life a whole lot easier for the region’s harvesters.

“This is the kind of business we are really looking into, and we would love to see it going because we need the market for certain parts of the trees that we have no market for,” Comeau said.

“When you have that part of the tree and you have no market, you still have to move that part and do something with it – so if you can find some kind of a market, no doubt about it, you’re getting more out of the whole tree.”

While Comeau, who represents the Northumberland Woodlot Owners Association within the provincial organization that speaks on behalf of some 42,000 members, said he’d like to see the NES plant get off the ground tomorrow, added that he feels good about what he’s seen so far.

Company officials, including its president and CEO Creelman, held an open house in the city last week and were more than happy to bring the public up to speed on their plans to develop the $70 million facility on the former UPM-Kymmene paper mill property.

NES is poised to send off its development applications to the provincial government for review in the coming days, with the goal of being able to break ground at the project site sometime next year.

The operation would create more than 60 direct jobs and dozens more in the company’s woodlands and transportation operations.

Plans would entail wood deliveries of up to 630,000 tonnes every year, which would be harnessed in the pellet-making process.

From there, upwards of 275,000 tonnes of wood pellets would be trucked north to the Port of Belledune and then shipped to clients in Europe.

Project manager Fenton Travis told the Miramichi Leader last week that NES has nearly finalized the requisite buyer’s agreements in order to make the business viable.

The clients that will be purchasing the product are almost exclusively large European energy companies that are looking to convert their power plants to a cleaner, renewable energy source rather than relying exclusively on coal.

In order to build the supply needed to meet those hefty fibre needs, while NES is counting heavily on having access to a 378,000 cubic-metre Crown allocation guaranteed by the former Tory government and re-upped by the current Liberal one, private deliveries also factor prominently into the plans.

The company’s business plans are calling for 70,000 tonnes of wood to be sourced through private or First Nations channels every year.

As it stands today, the only local destination for wood in the Miramichi area is the Arbec Forest Products oriented strandboard mill, the sole active mill in a city where thousands of jobs were tied directly to the forestry sector not that long ago.

“One of the things we have to realize is that there’s still some wood moving, but prices are very low,” Comeau said. “And when you don’t have that many mills operating, you tend to get those poor prices … but we’re certainly supportive of this project.”

Still, Comeau said woodcutters remain without a local market for cuts such as sawlogs, with the area’s only other sawmill – the Miramichi Lumber Products facility on Jane Street, shuttering nearly four years ago.

The fate of the former Atcon plywood mill in Nelson, meanwhile, remains in limbo years after a Quebec interest purchased the mill out of receivership with the intention to revive it as a going concern.

Those efforts have so far failed to gain any traction.

New Brunswick private woodlot owners are represented by seven forest products marketing boards, covering over 1.7 million hectares of land.

According to the federation, sales from private woodlots peaked in 2004-05 at $100 million before entering a period of rapid decline due to the global downturn.

Miramichi Mayor Adam Lordon said he’s enthusiastic about where the pellet mill project currently sits.

He said if and when it’s eventually realized, he said the operation would fit seamlessly into the city’s economic base.

“We’ve heard that they’ve been making good progress with potential customers, so this is definitely a promising sign,” Lordon said.

Northern Energy Solutions are still working to finalize raising capital for the venture and sorting out contracts for the right to build the mill itself.

Based on the current timelines, the mill would become operational sometime in 2020 before operating at a steady state in 2021.

CREDIT: Kris McDavid