Trade Northern Ontario

New hope for mill‘s new life

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New hope for mill‘s new life
By CARL CLUTCHEY The Chronicle Journal
Thursday, January 22, 2009     

The key part of a plan to resurrect Red Rock‘s idled forestry mill was flung into high gear this week.
Following a formal request from Ontario Power Authority for more renewable energy proposals, the operation ramped up its application for a power-purchasing agreement for a proposed $100-million cogen facility.
An agreement between the future flooring mill and OPA could be struck as early as the end of June, fortifying the operation‘s ability to secure financing and get into production.
“It‘s a crucial step,” Red Rock Mill Inc. president Bob Van Patten said Wednesday from his St. Louis, Mo., office. “We‘re going to get going this week to get our application completed.”
The 40-megawatt cogen would plug into the provincial grid, selling electricity to OPA as well as providing steam heat to Red Rock Mill‘s underlayment operation.
The cogen, fired by waste wood from the flooring plant, would virtually eliminate the operation‘s need to purchase natural gas.

OPA announced Tuesday that it is looking for another 100 megawatts of renewable energy from sources of biomass, including wood fibre.
The province says it wants to have 16,000 megawatts of energy from renewable sources by 2025. It currently has about half that.
Red Rock Mill Inc., which could be in production later this year, is to create 125 direct jobs – 100 in the flooring plant and 25 in the cogen facility.
Van Patten said continuous revenue from the cogen will help stabilize the overall operation whenever demand for underlayment falls off.
“To be honest, demand for underlayment is subject to upturns and downturns,” he said.
Red Rock‘s former high-cost linerboard mill has been closed since November 2006. About 400 people worked there when Montreal-based Norampac shut it down.
Van Patten‘s company took over the plant with a plan to make Multiply underlayment – the same product that was manufactured in nearby Nipigon before that town‘s mill burned down in 2007.
Retrofitting the Red Rock operation to make flooring instead of linerboard – the brown paper in beer boxes – is expected to cost an additional $60 million.
“I‘m confident that if (the cogen power agreement is approved) we will see many opportunities appear in the mill, and one of them will be the manufacture of underlayment,” said Red Rock Mayor Sam Sobush.
Even though the Multiply line has been off the market for nearly two years, Van Patten said it will be a good seller once it starts being made again.
Hardware chains acquiring an alternative product from Chinese suppliers have complained that build quality is not always up to snuff, he said.
Van Patten said he‘s confident he‘ll be able to get enough skilled and experienced workers when the Red Rock plant is gearing up for production.
“A lot of (Nip-Rock workers) have taken jobs out west, but many are saying, ’You get me a job back in (Red Rock), and I‘m there,‘” he said.
About 200 people applied for work last fall when Red Rock Mill Inc. made 20 positions available for dismantling and removing old equipment, Van Patten added.

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