Tai Cheng, Neucel vice president, Community and Government Affairs, appeared before Village of Port Alice council Wednesday night to open up a dialogue about lowering its taxes.
According to Mayor Jan Allen, Neucel’s taxes this year are about $950,000.
“That’s about half our tax revenue,” Allen said.
The Village received a letter from Neucel, which is owned by Fulida Group Holdings Ltd., outlining the reasons for its request for tax relief.
“We are currently in a planned six-month production curtailment in an effort to reduce costs and improve operations. If improvements cannot be realized, Neucel may face a longer shutdown or in the worst case, permanent closure,” wrote Chief Executive Officer Wanli Zhao.
“Neucel seeks support from key stakeholders to survive the current worldwide decline and threat to the forest products industry,” wrote Zhao.
In the letter, Neucel is asking for a deferral of its current tax obligations with a mutually-agreed payment plan, a re-evaluation of its current and future industrial tax assessment and a review of the Village tax assessment based on the value of services provided by the mill to the town.
“Neucel requires a fair municipal tax assessment that gives our mill the ability to compete with other pulp producers in Canada, the United States, South America and Asia. As recent announcements have shown, uncompetitive mills face closure,” said Zhao.
Cheng said Neucel has been operating in a difficult price environment for the last year.
“It is below what it costs to produce,” Cheng said.
“The shareholder would like to see some way of reducing the cost, to stop the cash burn,” Cheng said.
Cheng said the price for their specialty product has actually gone up in the last few weeks and seems to be holding.
“Hopefully things have kind of levelled off.”