A green shoot in the coastal forest

Tom Fletcher - Parksville Qualicum Beach News
Published: September 28, 2009

NANAIMO - Four buses carrying foresters, engineers, university professors and government staff from across the country rolled through the Cowichan Valley this week to see the signs of growth in an industry now known mostly for a long and painful decline.

A highlight of the Canadian Institute of Forestry tour was the Harmac pulp mill, pulled a year ago from under the auctioneer's gavel that has fallen on logging, milling and equipment manufacturing yards that once formed the backbone of the coastal forest industry.

Harmac Pacific, as it is now known, was opened in 1950, named for its founding lumber baron, H.R. MacMillan. It was written off as scrap and salvage by industry observers after its U.S. owner Pope & Talbot declared bankruptcy in 2008. Now, to the amazement of even some who work here, the old plant is a new, growing business owned by its employees and some angel investors. Nanaimo Forest Products Ltd. convinced a bankruptcy judge they could run it, and pulp started rolling off a single production line on Oct. 4, 2008.

"We just started up the second production line about a week ago, so we're in the midst of working out a few of the kinks, but by and large everything is going very well," said plant manager Paul Sadler, who did the same job for Pope & Talbot and was a key member of the transition team.

There's no market magic or technological wizardry involved. Sadler is the top executive now, and his worn hardhat isn't just for show. "It's not as hard to run these businesses as VPs and presidents make you think," he said.

The mill just hired another 45 workers to run the second line, bringing the total to 275. It's a long way from the more than 500 on the payroll before bankruptcy, and nearly all of them have their work gloves on the equipment.

Most of the employees are veterans of the previous ownership, and their hearts as well as their wallets are in it. Each one has put up $15,000 towards a commitment of $25,000 to be shareholders. Sick days are down by two thirds.

"We're doing it today with about 260 employees, so our productivity levels are unbelievably good, which is one reason we've been able to succeed," Sadler said. "The people here are working a lot harder than they once did, and wearing a lot more hats."

The Pulp and Paper Workers of Canada still represents the Harmac crew, but the union's militant days are gone. Owners are unlikely to strike or lock themselves out. PPWC Local 8 has signed an unprecedented 11-year contract, and has foregone a pay increase negotiated by the union elsewhere in the industry.

That stability is a key to securing sales contracts, said Levi Sampson, the strikingly young investor whose DRS Group brought international savvy and the deep pockets of oil and gas holdings to the Harmac table and sealed the deal.

"When I travel around the world, [customers] know there won't be any work stoppages," Sampson said.

Production is up to 1,000 tonnes a day, and nearly all of Harmac Pacific's bales of kraft pulp are shipped overseas. About half go to China, 40 per cent to Europe and only 10 per cent to the United States.

"We're going to have a barbecue on Oct. 4, and it's to celebrate one year up and running, and actually the date of our first bale coming off last year," Sampson said. "It's a pretty exciting time for us, and for a lot of our workers as well."

Television coverage of the barbecue is a given. In another bold rescue mission, Sampson just stepped in to help employees save CHEK TV, B.C.'s oldest local television station, which was kicked to the curb this summer by struggling CanWest Global as it restructures its operations to cope with massive debt.

Reduced costs, employee ownership and a family business feeling could be a winning formula that transfers from a dusty old mill to the shiny stage sets of the supper-hour newscast.