British Columbia government passes deadline to invest C$3.5M in new pulp-making technology for Harmac mill; Voith to no longer attempt development in province, to develop process with Suzano in Brazil, says consultant

PORT ALBERNI, British Columbia , August 12, 2011 () – A consultant for German-based technology company Voith AG said the deadline has come and gone for the B.C. government to invest in a potentially-revolutionary pulp-making technology, and the company is moving south.

Garry Young said, when the Wednesday deadline passed to receive $3.5 million funding for a developmental machine at Harmac in Nanaimo, Voith officials determined that they would no longer try to develop the new process in B.C.

"I spoke to Germany this morning, and they said that's it, finished, over with, kaput," Young said. "They are now going to develop it with Suzano Paper in Brazil."

Young said Voith needed the $3.5 million up front because in 2007, the company spent $15 million in its proposed partnership with Catalyst Paper's Port Alberni operation, and when the company backed out of the deal, the province "did nothing" to encourage the company to continue the process.

But there are varying opinions on just how close the Harmac deal was to completion. While Opposition MLAs including Alberni-Pacific Rim's Scott Fraser said the deal was but a signature away, Jobs, Tourism and Innovation Minister Pat Bell said he had "discussions," but neither side was firmly committed.

That was more or less born out by Harmac president Levi Sampson on Thursday.

"From our side of things, we said we were definitely interested in doing a feasibility study and try the technology at Harmac," Sampson said. "I knew there were discussions with Voith and the [provincial] government, but we weren't involved in their discussions."

Port Alberni Mayor Ken McRae, who installed and repaired pulp mill technology for 38 years, said the jury is still out on whether the Voith technology, known as "hybrid fibre," is as energy efficient as claimed. According to Young, hybrid fibre technology could reduce the electrical consumption per tonne of pulp from 3,500 kilowatt hours to between 150 to 250 kw.

"It's been quite a while since they were here with Catalyst.

How come none of the Scandinavian countries have jumped in?" McRae said. "Our No. 5 machine [at Catalyst] is Finnish technology. The best manufacturers right now are in Sweden, Finland and Norway."

McRae said Bell's reluctance to put money into a private company is consistent with his government's policy.

"At [Island Coastal Economic Trust], we have to look at that very carefully," he said. "We cannot subsidize one private company at the expense of another." Young and McRae concurred on one point: the majority of Canadian paper mill operations are controll ed by financial institutions without a discernible corporate vision. That makes them less responsive to market forces and less willing to make major investments in new technology.

But as an employee-owned enterprise, Sampson said Harmac is able to focus a collective will towards building for the future. While the Voith collaboration is now officially dead, the company is turning its attention towards a new boiler project that would allow them to sell more surplus electricity to B.C. Hydro.

"We will watch how things develop in [Brazil]," he said. "Only time will tell what kind of an opportunity it was."

Copyright Alberni Valley Times. All rights reserved.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.