Freeman Lumber announced Thursday that the Greenfield-based company could no longer afford to operate due to a lack of markets for wood chips following the closure of the Northern Pulp plant earlier this year.
The move means the loss of about 150 jobs, about $ 1 million a week in the local economy of Queens County and spillovers into the broader forest industry.
“It’s terribly troubling,” said co-owner Richard Freeman in a telephone interview.
“Many of these people we have been dealing with for generations. We are dealing with people with whom I remember my grandfather. These people are like family to us and it is heartbreaking. “
Company stocks wood chips while processing remaining log supply, but Freeman said it made no financial sense to continue buying wood when there is no market for wood chips .
“Many people think that wood chips are a by-product, but they are absolutely essential to the operation of a sawmill and we need income,” he said.
The company said the move was a direct result of the shutdown of Freeman’s “most critical customer”, Northern Pulp. The decision is not related to COVID-19, said Freeman.
Contested by geography
Northern Pulp, formerly the province’s biggest forestry player, had to close earlier this year when the Pictou County plant did not receive approval to build a new effluent treatment plant .
The company said it would continue to try to get approval, but this process – and potential construction – would take years.
Meanwhile, other members of the industry have rushed in to try to transition and find new markets.
Freeman Lumber, the largest down operation since the closure of Northern Pulp, has been particularly challenged by geography. Although other factories in the province may have temporarily sent wood chips to Port Hawkesbury Paper, it was too far to be profitable for Freeman Lumber.
Freeman said the company believes it has an arrangement to send its chips to a kraft pulp mill outside the province, but the cost of rail and truck shipping has made the business prohibitive.
“Most of the existing alternative facilities that could potentially handle this volume of chips are much further from us,” he said.
“A very big deal”
Stephen Cole, a forester and partner in woodland management company HC Haynes, said the loss of the province’s second-largest sawmill is “a big deal”, especially for western landowners and small factories from Nova Scotia.
H.C. Haynes told his contractors three weeks ago that there was no more work for them. Cole said the spillover effect is significant and affects more than 500 jobs.
“We’re talking about the road builders, the loggers, the landowners, the guys who chop some wood themselves, the forestry operators – and make no mistake, the garages, the fuel companies, they’re all going to feel too, “he said. said.
“This is our backup”
Jeff Fairn is one of those landowners who will benefit.
The Annapolis County farmer owns about 800 hectares of wood which he considers secondary income.
“If we have a bad agricultural year, this is our safeguard,” he said.
After two consecutive years of difficult farming due to weather damage, Fairn said the forest has become particularly critical. But he is now facing uncertainty as he sold his wood to Freeman Lumber.
“I had an agreement with Freeman to cut this spring to run this year and now they are closed, so we haven’t finished our wood,” he said.
Fairn estimates that he had about $ 300,000 worth of wood to cut.
“A passive now”
Likewise, Randall Knox, a third generation forester, now has nowhere to sell his logs.
Knox, owner of R.W. Knox Forestry Ltd., manages approximately 800 hectares of woodland in the counties of Lunenburg and Queens. He said that his five-person operation had to close and that he saw the value of his land plummet.
“With the exception of the house I live in, everything is classified as forestry and is now a liability rather than an asset,” he said.
Do not abandon
Freeman said the company has been looking for other markets since 2011, a year before Bowater Mersey, its main customer at the time, closed. That’s when Northern Pulp, hitherto Freeman’s Plan B, became its main customer.
Since then, diversification efforts have included studying biofuels, wood pellets, cogeneration plants, and the chip export markets.
“The problem is that any of them would have reduced our chip revenues by about 50 percent, and we operate in a market where we have to be competitive for private wood sold by landowners across the province. Said Freeman.
For now, Freeman said the company will continue to try to find a way to restart the plant and get people back to work.
“We just haven’t been able to find anything yet,” he said. “We certainly don’t give up, in any way. “