Any hopes that the weak Canadian dollar and low energy costs would revive the Miramichi, NB coated-paper mill have been dashed. The owner, Finnish paper giant UPM, has reportedly disabled the two machines so that they can never be used again to make paper.
A UPM spokesperson has confirmed that the machines were disabled in September in prepartion for selling the mill property, the Miramichi Leader reported yesterday. A union official claims that the disabling process involved drilling three-inch holes into rolls on the machines, which were relatively large and modern by North American standards.
UPM purchased the mill in 2000 but claims it never made a profit at the mill, which had the capacity to produce 450,000 tons per year of coated groundwood. It idled the mill in the summer of 2007 and closed it permanently a few months later.
The former owner, Repap, relied almost exclusively on brokers to sell its paper, but UPM had a reputation of being anti-broker. In the months between the sale to UPM being announced and actually closing, the mill reportedly lost half its business as brokers shifted their clients to other mills.
The mill was also plagued by labor strife, high freight costs, an inability to make acceptable rotogravure paper, an inefficient pulp operation, and an unfavorable currency market (most of its paper was priced in U.S. dollars)