Bowater Mersey gets $2.5 million from province

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The province of Nova Scotia has given a nice boost to the troubled Bowater Mersey Paper Company, in the form of $2.5 million. The funding comes through the Economic and Rural Development’s Community Development Trust Fund.

Spokesperson Robin Anthony was very pleased for the support for Bowater Mersey. “It gave us an opportunity to broaden our product into the book paper market,” she says.

The funds are to support the addition of book-grade paper to its manufacturing process. Book-grade paper, used mainly in the printing of paperback books, requires more demanding quality standards than those for newsprint.

The company applied for funding in 2008, while it was bringing the book paper capabilities online. The Brooklyn mill has produced newsprint for the past 78 years, but Anthony says expanding into book paper is creating new opportunities. “The key for us is it gives greater flexibility to serve the global markets,” she says.

According to the press release, the book-grade paper market tends to have more stable demand and pricing trends. So far, Anthony says the product has seen good response in the market, and the company continues to market it in Europe and Asia

The funding announcement won’t affect the shutdowns however, which has seen the mill operating at roughly 50 per cent of 2009. This is because the book paper was already part of the production when the shutdowns began.

Anthony added however without the book paper the shutdowns could have been worse. “If we had not developed that product and had orders, the opportunities to run on just newsprint would have been less than what we have run. “The challenge that lies ahead of us is to improve the production process to lower the cost of manufacturing.”

According to Donna Hooper, the media contact for the Department of Economic and Rural Development, the funds are considered a contribution to the company, and falls into the category where it doesn’t have to be paid back “It goes under the same scrutiny we have for a loan,” she added.

Economic and Rural Development is supporting the company's diversification plan through the Community Development Trust Fund. The $34.9-million fund was established in 2008 by the federal government to help communities and sectors experiencing economic challenges. "Bowater Mersey is managing through difficult economic times in this industry by finding innovative ways to reduce operating costs, improve productivity, and develop new product lines and markets," said Minister of Economic and Rural Development Percy Paris. "The fundamentals of this company are solid and, along with the company, its employees, suppliers, and customers and various governments, we want this mill to continue to be a viable part of our economy and return to higher employment levels as the economy rebounds in the coming months."

Bowater Mersey employs about 500 full-time employees. Its operations include the newsprint mill near Liverpool, Queens Co. the Oakhill sawmill near Bridgewater; the Mersey Woodlands forest management group and the Brooklyn Power Corporation in Brooklyn, Queens Co.

Indirectly, the company supports the jobs of more than 1,000 people in forest management and harvesting operations, private sawmills, trucking firms and other suppliers. Its products are exported around the world. Bowater Mersey has invested more than $7 million toward the product diversification project, including new manufacturing processes, technology and equipment.

The company has already marketed its book-grade paper in the United Kingdom and is seeking opportunities to supply European and Asian press rooms. Book-grade paper is shipped by vessel from the port at the Bowater Mersey mill as well as by container through the Port of Halifax.

Bowater Mersey continues to work closely within the industry to develop certified forest management practices. The co-generation plan produces electricity under contract to Nova Scotia Power Inc., which provides a stable steam supply to the newsprint plant.

Organizations: Bowater Mersey Paper Company, Community Development Trust Fund, Queens Co. Department of Economic and Rural Development Brooklyn Power Nova Scotia Power Inc.

Geographic location: Brooklyn, Nova Scotia, Europe Asia Liverpool Oakhill Bridgewater Woodlands forest United Kingdom Port of Halifax

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