Neucel sets two-month shutdown

Company announces a two-month shutdown to begin next week, citing a depressed market and reliability issues.

PORT ALICE—Employees of Neucel Specialty Cellulose are facing a bleak Christmas as the company announced a two-month shutdown to begin next week, citing a depressed market and reliability issues.

“It couldn’t have come at a worse time,” said Port Alice councillor Dave Stewart, “especially coming up to Christmas. I know there’s many employees living cheque-to-cheque, they’re going to have a tough time — two months is a long time to wait for a paycheque.”

Tai Cheng, Neucel’s Vice President of Community & Government Affairs, explained that the shutdown was necessary to provide maintenance to failing machinery in the plant. “We know it’s a big disappointment — if affects the whole North Island and it’s a big disruption. But without going down, operations in 2015 would be uncertain. We’re asking our employees to stand by us during this time.”

Cheng pointed to a series of forced shutdowns earlier this year to repair malfunctioning and aging machinery. Faced with the ongoing mechanical issues, along with a five- to eight-year low on market price for the end-product, viscose, the company opted to shut down operations and use the closure to undertake repairs ahead of a predicted price stabilization next year. Cheng stressed there were no permanent job losses planned.

But the shutdown will have a far-reaching effect, he acknowledged. “Almost every employee will be affected,” he said. “Unionized members have been given a temporary layoff — there’s about 250 on the unionized side. On the salaried side we’re still working on it and encouraging them to take vacation time; that’s around 80 employees. But we’re expecting everyone to return in January.”

Coun. Stewart noted that it was not just those facing layoff that would feel the closure. “I’d say there was a good 200 people (employed by the mill and living in Port Alice), but this is going to hit home in Port Hardy and Port McNeill as well as Port Alice — it’s going to touch all three communities,” he said.

“It worries me that many families will have to look elsewhere to find work and not return; that’ll affect the schools and so on.”

Stewart noted that Sea View Elementary/Junior Secondary had seen a boost in numbers in recent years, doubling in the last three years by his estimates. “All I can do is hope that (the shutdown) is less than the two months they’re predicting,” said the councillor. “Even if it doesn’t go two months, I worry that families will go and we’re going to be back to the core group of us … It’s a scary time for us here in Port Alice.”

Cheng said that the mill could reopen ahead of schedule if prices suddenly rose but said that the probability of a spike was very low. A high in 2011 saw a series of mill openings and conversions to capitalize on the surge in price. Since then, global production has outstripped demand, driving a downturn in prices.

“We’re trying to reinvest in the mill and hoping that prices will stabilize a bit in 2015. What we’re hearing from our analysts … is that there’ll be no real rise till 2016.”

The mill typically has planned maintenance shutdowns once or twice a year, explained Cheng, running from two to five weeks. The last time it faced a similar length of down time was in 2009. “We’re not able to manufacture without these major shutdowns,” he said. “We’re hoping people will take this time to spend with their families and come back in the new year,” said Cheng.

 

 

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