By Kate Irwin
The Radium sawmill will reopen before the year is out, Canfor confirmed this week, announcing a near-$40 million investment into the facility.
After a three-year shutdown, the wood products company reported on Thursday, April 26th, that they will pour $40 million into the two local sawmills in Canal Flats and Radium, allowing the latter to reopen sometime this fall.
With 170 people employed directly by the mill and a further 170 employed cutting lumber, the announcement represents a significant boost to the job market for the village of Radium.
“It’s exciting, and not just for Radium,” said Dee Conklin, Radium’s mayor. “This is truly good for the whole valley … It’s a huge investment that secures the future of the mill.”
Most of the money, $38.5 million, will go into upgrades to improve efficiency at the Radium Hot Springs sawmill, while $1.5 million will be put towards new drying equipment for Canal Flats, Canfor confirmed.
The investment marks the beginning of a series of improvements to the company’s southern interior mills, a multi-year capital investment project that comes after the company reported poor first quarter returns.
“We’re pretty excited to be in a position to reopen,” said Christine Kennedy, Director of Public Affairs for Canfor. “This represents a significant investment in Canfor mills to make them more efficient, top-performing lumber producers.”
The sawmill in Radium Hot Springs underwent an indefinite closure in May 2009, one of 23 mills that was shut in the B.C. Interior as a result of the prolonged housing market downturn in the United States.
The closure put 167 Radium mill employees out of work. While a skeleton crew remained to keep the facility in functional condition, most were forced to seek employment elsewhere.
“The signs were always there that they hadn’t closed down for good … we always knew they would come back,” said Mayor Conklin. “They’ve always kept the site impeccably clean and retained workers on shift.”
After three years, during which Employment Insurance payouts ceased and pension contributions dried up, the wait was an uneasy one, said Gary Melnyk, local chair of United Steelworkers, the union representing the mill workers.
“Some have gone through their savings, some have been almost on the brink of losing their homes — it has been really, really tough,” he said. “It’s like a weight has been lifted from my shoulders right now. I’m afraid I’ll wake up and it’ll turn out to be a dream.”
While the mill’s former workers lost their jobs, they did retain their seniority, Mr. Melnyk explained. This means that anybody looking to return to work could restart in a position of an equivalent seniority level.
“I’d estimate maybe 50 per cent will return,” Mr. Melnyk added. “You’ve got to factor in those who moved away, those who retired … but those who stayed should be able to go back in and pick up where they left off. Usually after this length of time shut down you have to start back at square one.”
There will be a recall process for former employees, Ms. Kennedy confirmed, with the specifics not available until closer to the opening date.
Despite the official Canfor announcement and a meeting with the company on April 22nd to discuss terms and conditions, many of the former mill workers still can’t quite believe the facility is opening its doors again, Mr. Melnyk said.
“Some guys were asking, “Is it for real?’ ‘Is it just hearsay?’” he said. “When we walk back onto the property and that first log goes through we’ll start to feel more secure. It’s going to take a few years to recover what we’ve lost … After depleting savings people have to turn around and put them all back again.”
But before workers can head back to the site, significant modernization and upgrading must take place.
The work, which began on Tuesday, will include adding a new planer, installation of a biomass energy system, and modifications to the existing facilities.
The Canal Flats mill, which Canfor bought from Tembec in November 2011, will gain improved drying facilities for lumber.
“It’s all about efficiency, modernizing and improving capacity,” Ms. Kennedy explained. “At the moment the Radium mill’s economics are not great because it relies on propane to heat the kilns to dry lumber, which is very expensive.”
The new biomass system being installed will burn sawmill residue to heat the kilns, reducing operating costs. The site will also be modernized and a new greenfield planer with machine stress-rated grading capacity, will be installed, she added.
“It has taken three years for Canfor to redesign and restructure the company, we’re one of the last mills to reopen,” Mayor Conklin said. “I’m just thrilled … It’s tough to know whether the downturn was just the mill, or that plus the recession, but certainly businesses have been hurting because of the closure.
“Obviously Canfor have a long-term vision and huge plans for this mill … we’re hoping it will regenerate Radium with an influx of new people.”
The mill’s opening date is set for sometime during the late fall or early winter. In addition to direct employment, the restart will also create significant quantities of work for independent contractors such as trucking and haulage companies.
The announcement came as one bright spot in an otherwise gloomy start to the year for B.C.’s forestry industry.
During the past three months, four workers have killed and two plants destroyed by explosions and fires at the Burns Lake and Prince George sawmills. The explosions are being linked to dust being given off by pine beetle-infected logs during cutting.