Idled Hornepayne, Ontario lumber mill gets new life

THUNDER BAY (Scrap Monster): Frank Dottori, president of Hornepayne Lumber LP has closed a deal to purchase the assets of the idled Hornepayne, Ont. Lumber mill formerly owned by Olav Haavaldsrud Timber (OHT) Company. The facility had shut its doors in November last year, leaving around 150 people jobless. The new owner has announced that the mill operations are expected to commence as early as January next year with one shift in operation. A second shift is scheduled to be added during the second quarter of 2017, but the prospects of that depends on the likelihood of a new softwood lumber deal between the US and Canada before end of the mid-October deadline.

According to PricewaterhouseCoopers, who acted as receiver in insolvency proceedings, the transaction is in the best interest of all parties. The purchase deal would give new life to the lumber mill which had been in operation for 63 long years. It noted that the mill was Hornepayne’s second largest employer when it initially announced a three-week shutdown in November, after which the mill was never brought back into operation. At the time of closing, the company had reported debt exceeding $3.5 million. Meantime, PricewaterhouseCoopers noted that the restart of the mill may provide employment opportunities to some of the former OHT employees. The mill is also expected to bring in huge benefits to Northern Ontario region’s economy.

Hornepayne mayor Morley Forster stated that the Township is pleased to hear about the reopening of the mill. He expressed the hope that reopening of the mill would trigger and support the growth of related industries such as trucking industry in the area. However, Forster noted that the new owners must have to hold talks with members of United Steelworkers Local 1-2010 to finalize the terms of operation at the mill.

Meantime, Dottori stated that the purchase of the former OHT mill will re-activate the northern Ontario forest industry. Further, he confirmed that the purchase deal does not include adjacent biomass fuel-fired co-generation facility. Negotiations are on to purchase the co-generation plant as well, he added. Proximity to the earlier purchased White River Forest Products lumber mill will help complement the operations at both facilities, noted Dottori.

Olav Haavaldsrud Timber had idled the Hornepayne lumber mill in late November for three weeks, laying off 146 people. However, what began as a temporary shutdown later grew into a permanent one. PricewaterhouseCoopers, who was appointed by the court as the receiver to deal with the insolvency proceedings, had identified 40 prospective buyers for the lumber mill facility. Out of this, seven companies were selected as qualified bidders. Later, three companies had qualified to the second stage. Two companies had placed their bids, from which Hornepayne Lumber LP was declared to be the successful bidder.

Frank Dottori founded Tembec in 1973. When he retired from the company in 2005, it had transformed itself into a global forest products company with 55 mills spread across North America, Europe and South America. In 2013, he had reopened the White River Forest Products by making major improvements through fresh investments.