Neucel Specialty Cellulose mill | production, paper mill, pulp and paper industry

 production, paper mill, pulp and paper industry

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This mill produces dissolving cellulose fibre from wood chips. The fibre is used in rayon, cellophane film, detergents, celluloid (photo film), wallpaper glue, explosives, food thickeners for ice cream and other foods, agricultural chemicals, pharmaceuticals, and eyewear. Neucel Specialty Cellulose employs about 400 people and produces about 195,000 tonnes of cellulose pulp per year.

www.neucel.com/

Port Alice began in about 1917, with the building of the pulp mill by Whalen Pulp & Paper Mills Ltd. The mill is still the main employer, and, indeed, the reason that Port Alice exists. The town, originally located beside the mill, moved to its current location in 1965, becoming British Columbia's first "instant municipality."

The mill has had several owners and names over the decades--Whalen, BC Pulp & Paper Company, Alaska Pine & Cellulose Ltd, Rayonier Canada Inc., IT&T Rayonier, Doman Industries (as Western Forest Products and later Western Pulp Partnership), Lapointe Partners Inc. (as Port Alice Specialty Cellulose), and finally Neucel, which reopened the mill in late 2006. For its entire history it has produced dissolving pulp using the sulphite process. Despite the high quality of its raw material (western hemlock) and valuable product, the mill's remote location and high costs of production together with market conditions has forced many shutdowns over the years.

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The mill was involved in a recent corporate scandal. By 2004, the owner Doman Industries was in creditor protection and the mill had been losing money by the millions. The company's receiver forced Doman to close the mill. But just before this order came into effect in May 2004, Doman sold the mill to Lapointe Partners Inc., a management, consulting and mergers & acquisition firm focused on the pulp and paper industry, for one dollar, with Lapointe reportedly assuming all balance sheet obligations and liabilities. Brascan, acting as receiver for Doman, reportedly paid Lapointe $5.5 million to run the mill. The US-based LaPointe did not have a favourable reputation, and nagging worries about the firm soon proved all too true--the company didn't invest any money in the plant, even though it produced a specialty product that was in high demand worldwide and was potentially highly profitable.

On Sept. 9, 2004 the union discovered that the company had failed to make the required payments for pension contributions, child support and dental and health premiums, even though the money had been deducted from the workers' paychecks. The company suddenly declared bankruptcy on Oct. 22, giving the workers only 2 hours notice of closure. Lapointe also failed to pay the wages earned during the previous two weeks. Later, it was found that Lapointe had run the mill into the ground, stripping the mill of all inventory and sellable assets ($13 million), and then skipped the country leaving with bills to suppliers all over the continent and an estimated $1.55 million dollars in unpaid wages. Lapointe cleared $15 million from their skullbuggery (not bad for a $1 investment, eh! ).

It was obvious that Lapointe only bought the mill to make a fast buck.

RCMP investigated and recommended seven charges against the owners, including fraud, misappropriation of funds, breach of trust, and threats and retaliation against employees. Unfortunately, since the owners had left the country, the long arm of the law could not bring them to justice despite a Canadian government extradition request. The Mounties couldn't get their man this time!