Mill aims to strengthen position in paper market. (Thunder Bay).

A three- to five-year plan under consideration by the Cascades Group, an environmentally conscious operator in the pulp and paper industry, could see one of Ontario's oldest paper mills increase its annual production from the current level of 165,000 tons to more than 200,000 tons.

The plan for the former Abitibi Provincial Papers mill in Thunder Bay is still in its preliminary stages, says their general manager, John Brophy. However, he does indicate that the plan encompasses a number of smaller projects that could total up to $40 million in capital investments.

"We do have a plan that affects both our quality and production levels, but it is not for certain or anything," Brophy says. "It is a direction we want to go, but it all depends on economics and the availability of capital dollars and profitability at the mill."

As part of the plan, the increase in annual output at the Thunder Bay mill would be achieved through a' reduction in the company's quality losses and an increase in the output of their paper machine, which would be accomplished by increasing its speeds.

The company has already put a capital budget forward, and Brophy says he is just waiting to hear back from the parent company, Cascades Group.

Ultimately though, Brophy feels a plan like this had to be looked at in order for the company to remain-competitive in the long term.

"We know that we have to improve our quality to remain competitive in a market where you are competing globally against mills all over the world and the bar has been raised over the last few years as to what our customers can expect, in terms of quality," he says. "We have to respond to that."

In addition, Brophy points out that energy costs continue to rise, which poses another challenge for the company.

"The best way to lower the impact of that is to get more production through less waste so you can spread your fixed costs over more production and help the profitability of your plant."

Although details about the plan and what exactly it involves are still being worked out by the company, Brophy is still excited about the initial plans and he believes that no matter what happens, customers can still expect a high quality product from the company.

"We are definitely looking forward to these projects because it all doesn't hinge on one particular thing," he says. "There are a number of small individual projects that can be successful independent of one another, so it is not that we have to spend a whole influx of capital in any one spot. We can take it step by step to whatever speed is appropriate...but customers can expect us to have a good, competitive quality sheet in the market."

Currently, the paper market is depressed, Brophy says, so he feels it is essential for the company to take the proposed plan one step at a time.

"A lot of it depends on the coded paper market," he says. "It is very depressed right now and the paper companies are not very profitable right now, so it is very difficult to get capital. You basically have to go one step at a time."

The mill in Thunder Bay produces four categories of paper for the marketplace, including return cards for magazines, coated sheets used by the magazine industry, high-quality coated paper used in promotional material and specialty paper used for labels. For the last five years, the mill has been a part of the Cascades Group.