Update on Neucel curtailment

Months after Neucel announced a curtailment in operations, how is Port Alice faring?

The temporary closure of a mill that employs a significant number of Port Alice’s workforce has brought concern over what the future will bring for the town of about 800 people. On March 1 of this year, Neucel Speciality Cellulose announced a curtailment in production at their Port Alice pulp mill. For many B.C. towns that rely largely on a single resource or employer, the cycle of closures and market curtailments is expected, if not desirable. Five months after the curtailment was announced, what does the future hold for mill workers, and how is Port Alice faring?

Tai Cheng, vice president of community and government affairs for Neucel, explained that although the curtailment was only six months initially, it has been extended until 2016 while they wait for the market to improve. Cheng says it has improved a lot over the past three months, and he hopes that they may be able to open again by early 2016. In the meantime, he says Neucel is examining some projects to improve viability and may hopefully create some jobs sooner. He says that there will be a better understanding of the mill’s timeline in the next 3-4 weeks.

Cheng explains that the pulp produced at the Port Alice mill is a commodity traded with a market price dictated by a commodity exchange in Shanghai. It is currently around $840 US a tonne, and holding steady. Cheng would not divulge at what price Neucel would be confident in re-opening the mill, but did say that in the last few years supply has exceeded demand. Neucel has asked for a 25 per cent municipal tax cut from Port Alice.

“I don’t believe permanent closure is something that is going to happen here,” Port Alice Mayor Jan Allen says. Allen says that when re-opening will occur is something that is still up in the air.

She says that some of the mill’s tradesmen have secured employment elsewhere. Mill closure is something Allen has been through before, both in Port Alice and when she lived in Ocean Falls, and she is confident it will re-open in 2016.

Cheng says that under labour agreements with employees, Neucel is still paying benefits, but they run out in the fall. “At that point we may see some movement,” he says as “there is a little less incentive at that time to stick around this area.”

Cheng notes they understand the longer employees have to wait for the mill to re-open, the more they would expect that they are pursuing alternative work. He does however, believe that people are familiar with the ups and downs of the industry.

“It is a very cyclical industry, so a lot of people understand that this situation is going to happen.”

 

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