With new ownership at the Ear Falls Sawmill, many are wondering what the future holds for the mill and their future employment.

At the end of March, Eacom Timber Corporation, under a definitive purchase agreement, acquired seven sawmills and an equity interest in an eighth sawmill from Domtar Corporation.  The Ear Falls sawmill is one of two purchased that are currently idled.

The financial aspects of the purchase have been addressed, and terms and conditions have been worked out.

Due to a regulatory process taking place with the Ontario and Quebec governments, the new owners are waiting for the tenure transfers to take place, which is a normal process.  This process is expected to be complete in late June or early July.  Once the transfers are complete, the deal with Domtar and Eacom will then be closed and possession will revert to Eacom.

“It is our intention after we close the transaction, to start having discussions immediately with the management team, to develop a plan to restart Ear Falls asap” says Rick Doman, President and CEO of Eacom Timber Corporation.

Doman reports that the Ear Falls mill is a higher cost to operate, but the management team, led by Jean-François Mérette, will work on how best to address this issue.  Doman predicts the mill can be upgraded to make it globally competitive so it can run in a more sustainable manner.

“It needs some upgrades which we will be working on to make it cost competitive with some of the other mills in the East, but we think the future is very bright for the mill and it’s employees.”

Working with Domtar on the wood rights, Doman feels there should be no complications in this area.  There are no agreements being made at this time in the area of lumber contractors, as Eacom cannot negotiate on a on asset it has yet to physically take over.

With previous union agreements still in place, Doman says,” We expect to work closely with the CEP to get the mill operating again as soon as possible.  We are looking forward to building a relationship with the CEP, and it’s members.”

Eacom is looking to develop a plan to ensure that the mill has good opportunity over the long term, and is looking at how best to restructure to reduce cost.

“We want to do it right so the mill can operate more sustainably in the future.  We understand it’s not easy for forest workers with the current downturn”, said Doman.

Although there are rumors circulating in our small communities of the mill being purchased just to ship the inventory to other facilities, Doman ensures that these are just rumors.

“We have no plans to not operate the mill, and we have no plans to sell off or move off equipment.  We like the operation as it is and are excited to get it going.”

Doman could not confirm any anticipated start date, as the deal has yet to close.  He does feel that employees should not worry about the future of the mill, and it’s reopening is imminent.

Doman states, “Hopefully we can be a bright star for the local communities because that’s our intention.”

- Ally Dunham

The idled Ear Falls sawmill as well as the rest of Domtar’s solid timber products division changed hands, Monday, as the company announced the sale of sawmill assets to Eacom, a new entrant to the forest industry.

Operations have been suspended at the Ear Falls facility since August 2009.

Other mills included in the transaction include Timmins, Nairn Centre and Gogama in Ontario, as well as Val-d’Or, Ste-Marie and Matagami in Quebec. Eacom has also purchased an equity interest in an eighth Domtar sawmill, in Elk Lake, Ontario.

The assets will include the transfer or grant of tenures to enable production at the mills. The sawmills transferred as part of the transaction represent approximately 3.5 million cubic metres of annual logging rights and a production capacity of close to 900 million board feet.

The $80 million transaction plus working-capital elements estimated at $30 million to $40 million is expected to be finalized over the summer.

Eacom, now based in Vancouver, will establish its headquarters in Montreal, QC and will become one of the largest publicly-traded lumber producers in Eastern Canada. Domtar forest products employees and its management team will be transitioning to EACOM.

“With this acquisition we pursue our vision of becoming a major softwood lumber producer and we look forward to integrating Domtar’s leading wood products management team to ensure a smooth transition. We recognize that customers have choices in wood products suppliers, and we will work hard to secure their business, notably through our continued commitment to the FSC-certification,” said Rick Doman, President and Chief Executive Officer of Eacom Timber Corporation in a statement.

It’s another stroke of bad luck for a community who could use some good news.
Domtar announced early this week that they will suspend their Ear Falls sawmill operations indefinitely, affecting as many as 130 workers. Related forestlands round wood harvesting activity in the Trout Forest will also be affected.
Chipping and road construction work also occurring in the Trout Forest related to Dryden’s pulp operations will continue.
Citing a collapse in demand in the lumber market, an unfavourable Canada/U.S. exchange rate and high input and operating costs, the forest products company made the Ear Falls announcement just a week after workers returned to the sawmill from a four-month shutdown.
“This is all about customer demand and the economic downturn in the United States,” said Domtar spokesperson Bonnie Skene. “That’s the primary market for the lumber produced in Ear Falls. There are a number of things that need to come together in order to position it to start up. A lower exchange rate isn’t a silver bullet, but it would help. Really, the big one is customer demand and we’re continuing to work on reducing manufacturing costs.”
The mill will maintain operations into October.
“The suspension is scheduled to start in October and it will be a phased shutdown,” said Skene. “The reason that we’re announcing it so far out is to provide employees with a notice period and to process the existing log inventory that’s in the yard.”

-Chris Marchand