Jan. 21, 2009
A deal to buy the buy the Weyerhaeuser mill may be dead because of problems getting a wood allocation.
Arbec's vice-president of finance Serge Mercier said in a story in the Telegraph-Journal the deal expired in December and the company has no plans to pursue a new one.
The forestry company had a conditional deal with Weyerhaeuser to buy the oriented strand board mill, but it was conditional on a sufficient wood allocation.
They didn't get the allocation before the deal expired in early December.
Natural Resources Department spokesman Steve Benteau said his department received letters from Arbec expressing interest in an allocation with rough numbers for the amount of wood they would need.
"We never received an industrial plan or business plan on the basis of what we require."
Mercier confirmed in an e-mail the conditional deal expired and said the company provided the government with a plan for the mill.
"We have presented a preliminary business plan to DNR and MLAs in last August and requested sufficient wood allocations to operate the Miramichi OSB mill on a long term basis." Provincial guidelines set out in the Crown Lands and Forests Act, require a forest management agreement between the province and the person seeking a wood allocation. The agreement requires submission of industrial, management and operating plans.
An industrial plan describes all aspects of the wood processing facility, including investment in the plant, employment levels, production capacity, end product production levels, all expected wood sources, markets to be served and any other information required by regulation over a ten year period.
Benteau said his department told Arbec they would need to submit those plans before receiving a wood allocation.
"Again, we need some detailed information on their proposal."
Any proposal would have to be evaluated carefully, Benteau said and added he couldn't speculate on how long it would take for Arbec to get an allocation if all the documents are submitted.
"We obviously need the information to make the determination."
Benteau said he hadn't heard about Arbec's plans to let the deal with Weyerhaeuser die until he read it in the paper yesterday.
"We would prefer to hear from them directly."
Weyerhaeuser's public affairs manager Wayne Roznowsky said last week Arbec was waiting for the wood allocation, but he didn't have any updates on the deal.
"That's where it's been since."
Because Weyerhaeuser no longer has a wood allocation in New Brunswick, Roznowsky said he didn't know what was happening between Arbec and the government.
"It's between those two groups."
Benteau said his department wants to try to keep the mill open, if possible, and is willing to meet with Arbec to see what their plans are for the mill.
"Hopefully we'll get this resolved."
Natural Resources Minister Wally Stiles contacted Arbec to try and arrange a meeting with company officials and looks forward to meeting with them, Benteau said.
"Mr. Stiles wrote them last week and made that offer to sit down with them."
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