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Northwest B.C. community reeling from impending paper mill closure
[October 31, 2009]

Northwest B.C. community reeling from impending paper mill closure

(Canadian Press DataFile Via Acquire Media NewsEdge) PRINCE RUPERT, B.C. _ As a northwestern B.C. community braces for the impending closure of a paper mill that will put at least 500 people out of work, officials are airing concerns about what it will mean for the town's economy.

The council of Kitimat, east of Prince Rupert, will hold an emergency meeting this weekend to discuss the Eurocan mill shutdown with West Fraser Timber executives.

Kitimat Mayor Joanne Monoghan, whose phone hasn't stopped ringing, expects to play a major role in helping citizens cope.

``I feel very, very bad for the employees. I want to give them my greatest sympathy,'' she said. ``There is nothing I can even say other than I feel very, very bad.'' Hank Ketcham, West Fraser president, said closing the mill is the company's ``only reasonable alternative.'' ``We deeply regret the impact the mill closure will have on our 535 employees, their families and the community and we will ensure those who are affected are treated with fairness and respect,'' he said in a statement Wednesday.

Allan Hewiston, Kitimat Ice Demons president, said the closure _ set to occur in January _ is the worst news the community could have received.

``It's pretty devastating and very worrying,'' he said, adding that many fans who fill the rafters to cheer on the successful senior men's hockey team work at the local industrial plants.

Over the years, the 40-year-old Eurocan mill _ which produces linerboard and kraft paper _ has struggled with high costs and negative returns. West Fraser said prices for the mill's products have fallen by 40 per cent in the past year alone.

The company has also been forced to rely on expensive whole log chips, instead of the lower-cost alternative, as a result of a slump in demand for lumber.

The global economic slowdown, rising loonie and severe competition from low-cost paper producers in other countries are other factors in the price drop.

West Fraser said it will take a $138-million charge in the third quarter related to assets at the Kitimat facility. It also expects to incur costs of about $70-million over the next few quarters related to the shutdown of the facility.

Kitimat's loss is not new to B.C.'s northwest region, where the manufacturing economy has largely been tied to the success of the U.S. market.

``It's a terrible day not just for the people living in Kitimat, but I would argue for all the people in the Northwest,'' said Skeena MLA Robin Austin.

``With a big company like that, it isn't just the 500 jobs in Kitimat. It's all kinds of suppliers and truckers that are tied to it. It's probably 1,000 jobs, really.'' Business owners in nearby Terrace are almost as dismayed as the those in Kitimat.

Garry McCarthy, who owns the MacCarthy Motors car dealership, said about 30 to 35 per cent of his business relies on Kitimat purchasers.

``Terrace is the hub for the area. And there are good people who have lost good jobs this week,'' he said.

With the closure inevitable, some community members have begun discussing how to move forward.

``We need to be putting our heads together so that we can stabilize the economy,'' said Zeno Krekic, Prince Rupert's city planner and long-time Kitimat resident. ``The question we must be answering is 'How do we get out of the resource-based economies?''' Krekic will meet with regional city planners this weekend in Terrace to discuss the future of the region. Community leaders are also organizing an emergency strategic planning session to be held Nov. 7 and 8 with the aid of Skeena-Bulkley Valley MLA Nathan Cullen.

Cullen said he is confident Kitimat will rebound from the Eurocan crisis.

``I've spoken with workers and community leaders several times since the announcement, and will continue to do so as we come to terms with this new reality and begin to make a plan for the future,'' he said in a release.

But he acknowledged there may be deep fear and uncertainty on the part of families, businesses and northwest communities.

``You can't suddenly have 535 direct jobs and thousands more indirect jobs ripped out from under you and not be absolutely reeling.'' Eurocan has operated in Kitimat economy for 40 years and was purchased by West Fraser in 1981.

(Prince Rupert Daily News) (c) 2009 The Canadian Press

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