NewPage Port Hawkesbury in Nova Scotia would pay less for power but be exposed to cost hikes under proposed agreement, hire 315 initially to produce SC paper, do capital improvements, says man behind Pacific West's bid for the mill

LOS ANGELES , May 17, 2012 () –

Pacific West Commercial Corp. has reached an agreement for power and has a business plan for restarting the NewPage Port Hawkesbury Ltd. mill if the deal goes through, said the key figure behind Pacific West’s bid, reported The Cape Breton Post on May 16.

The mill in Point Tupper, Nova Scotia, would pay less for power but be exposed to cost increases under an agreement reached with Nova Scotia Power Inc., said Ron Stern, president of Vancouver, British Columbia-based Stern Partners Inc., which is affiliated with Pacific West.

Pacific West is trying to sharply cut the mill’s energy costs without having ratepayers pick up the tab, Stern said during the annual general meeting of the Strait Area Chamber of Commerce in Port Hawkesbury on May 15, The Cape Breton Post reported.

Under the power agreement, which has to be approved by the province’s Utility and Review Board, Nova Scotia Power would take a stake in the mill and be paid for electricity through dividends.

The mill would pay its own costs of being on the Nova Scotia Power system and contribute to the utility’s fixed costs. Its power rate would be hour-by-hour set by the utility the day before delivery. If the utility’s costs go up, the mill’s electricity rate jumps, reported The Cape Breton Post.

If the deal to sell the mill to Pacific West goes through, 315 people would be hired initially to operate the supercalendered (SC) paper machine and upgrade the mill, said Marc Dube, the mill’s proposed restructuring manager. The workforce would be reduced once those capital improvements are completed, he said.

The NewPage facility is the “primo” mill in North America, with an annual production capacity of 400,000 tonnes per year of SC paper, said Stern. The company does not plan to restart the mill’s newsprint machine. The mill has been idle since last September, The Cape Breton Post reported.

The primary source of this article is The Cape Breton Post, Sydney, Nova Scotia, on May 16, 2012.

 

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