Jim Boniferro: entrepreneur of the year.

When Domtar announced it was closing its Sault Ste. Marie hardwood mill, it could have been chalked up as another bad news economic story in this job-hungry city of 74,000.

But its mill manager, Jim Boniferro, was willing to take a risk and challenge his employees to succeed.

While industry insiders saw only the flaws in reviving an antiquated mill, he saw only its potential.

Supporters laud the 44-year-old Sault Ste. Marie native as a passionate and well-rounded business professional whose skills were put to the test that November day in 2002 when the paper giant handed out pink slips to Boniferro and his workforce of 150.

Though the news came as no great surprise to him--the hardwood mill didn't fit into Domtar's long-term plans and they had quietly attempted to sell it without success--it started his wheels turning. It became a defining moment in a 20-year lumber industry career that began in 1982 as a sales representative for Thunder Bay's Great West Timber.

Rather than walk away and find work elsewhere, he cultivated his lengthy Rolodex of contacts and began talks with long-time business associate Tom Fox, president of Fox Lumber Sales of Hamilton, Montana.

Together, they set about developing a business plan to purchase the mill as owner-operators.

Boniferro, who came to work for Domtar in 1999, was intrigued by the mill's string of success stories over its 55-year-old history and its engrained connection with local residents.

"Oftentimes with the Italian community, they came to Sault Ste. Marie to work at this mill when it was Roddis Lumber back in the 1950s. That's what brought their families here."

But more importantly, Boniferro believed in the place. He knew the mill's potential, given its proximity to the U.S. border, its transportation connections, the high level of employee expertise and the ability to expand the product into new markets.

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"I went into this with a whole bunch of confidence and didn't allow the detractors to throw stones at it."

There were many naysayers. He found "zero financial support" to resuscitate, what was deemed, a money-losing mill.

"Quite frankly, we did not have a financial institution that was willing to back us," says Boniferro, a past chairman of the Ontario Lumber Manufacturers Association.

"Nobody would say it out front, but we had the sense from numerous agencies, associations and suppliers that there was a hesitation to say, 'We don't think you can do it, we don't believe in it.'"

It was a motivational message he would later deliver to his 32 employees on the operation's first day in April 2002--one month after the deal was finalized under the banner of Boniferro Mill Works.

The two partners prepared a comprehensive business plan for the Ministry of Natural Resources, outlining their first-year expectations, including plans to upgrade the facility by investing $5 million in capital improvements over five years.

"We chose to take destiny into our own hands and say we are going to be an owners group and put 20 years of saw milling business on the line to say, we believe in what we have here."

Boniferro deflects the credit to others, including Domtar, for their support during the transition.

The mill still maintains a close relationship with the national paper manufacturer through a number of key agreements, including a five-year contract to purchase all the mill's hardwood pulp and wood chips.

They expedited the transfer of the operating licences to the Boniferro group and have carried the financing on the deal, serving as the first mortgage holder on the property and buildings for five more years.

The mill's union, the Industrial, Wood and Allied Workers of Canada, also made a commitment to preserve jobs with a new five-year agreement.

Under the plant's hiring criteria, all mill employees are cross-trained to handle a range of jobs during periods of staff shortages.

Boniferro says the end result has been a "win-win-win" situation with Domtar securing a reliable wood chip and pulp supplier, himself serving at the helm of an owners group and the mill now boasting 65 employees with gradually expanding operations.

Today, the mill's average daily production is 60,000 board feet on a one-shift basis, amounting to 17 million board feet annually--a figure that is sustainable with their business plan and with Ministry-recognized operating levels off their Crown units.

In their abbreviated inaugural 2003 year, the company generated $10 million (Cdn) in sales. This year, they expect to ring up between $17 million and $20 million.

Fox Lumber continues as the exclusive sales agent for product manufactured at Boniferro Mill Works.

While the U.S. remains their primary market with flooring manufacturers, they have entered specialty markets with makers of bowling pins, broom handles and brushes, and are exploring some high-end opportunities in California and Japan.

Due to some better-than-anticipated costing savings and a strong hardwood market, Boniferro Mill Works is slightly ahead of its business plan schedule, having already invested $1.87 million in plant upgrades over the first 12 months of operation. Upgrades include the addition of a new Tele Twin MEM Scragg saw line to the mill's manufacturing capacity.

St. Marys Paper uses their wood waste as hog fuel in their boilers, and Boniferro Mill Works recently formed an alliance with G.P. Flakeboard to send over their sawdust and shavings for medium-density-fibreboard manufacturing.

"By diversifying our byproduct, it has become an important revenue-generating (tool) for us," fetching about $100 per tonne.

By Ian Ross 

Northern Ontario Business