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Mill proposes recycling venture to bypass new effluent controls.

MacMillan-Bloedel Ltd. plans to enter the recycling industry within two years at its Sturgeon Falls corrugated cardboard plant.

The company plans to construct a $14.5 million recycling facility at its former hardwood siding plant which closed at the end of last year after racking up an as estimated $3-million loss for the year. The closure put more than 160 people out of work.

The move to recycling will allow the company to bypass costly federal effluent regulations, preserve the mill's 140 remaining jobs and maintain the seven-day-a-week operation of the mill.

By Jan. 1 1994 all Canadian pulp mills, including Sturgeon Falls, must reduce the level of dioxins and furans in their waste water to levels which cannot be measured by specific procedures. The mills must also reduce the amount of conventional pollutants in pulp and paper effluent.

"It would cost the company between $8 million and $10 million to meet these regulations, and it would have added another $2 million to our annual production costs," says Wally Shisko, MacMillan-Bloedel's resident mill manager in Sturgeon Falls.

However, the move to recycling will also eliminate the presence of dioxin because it was previously removed from the recyclable materials.

"Theoretically, we're getting rid of the chemicals. Someone else has already removed the chemicals for us," says Shisko.

In addition, the absence of chemicals in recyclable material is expected to improve the mill's efficiency. Shisko says the mill achieved an approximate yield of 70 per cent with virgin fibre. Chemicals extracted from the wood accounted for the remaining 30 per cent.

FINANCING

Approximately $7.5 million of the project's construction cost is expected to be covered by loans and grants from provincial government agencies such as the Northern Ontario Development Corporation (NODC) and the Northern Ontario Heritage Fund. A $3-million commercial loan has been secured by MacMillan-Bloedel. Company officials also expect to receive a $4-million grant from the Ministry of the Environment (MOE).

The proposed recycling plant marks the first time that a municipal economic development corporation has entered into a joint-venture agreement with a private company. Such a move is normally prohibited by the Municipal Act, but an exception was made through the passing of a private member's bill introduced by Nipissing MPP and Progressive Conservative leader Mike Harris.

At press time, a formal agreement between MacMillan-Bloedel and the West Nipissing Economic Development Corporation was being examined by the municipal agency's lawyer.

Development corporation president Guy Rochon says the agency's role in the partnership is to act as a go-between with the company and province and to help secure the financing for the project. In return, the agency will receive a portion of any profits produced by the mill.

"We'll basically be agents for the government in the deal," Rochon says.

The plant, which is in the midst of receiving final approvals from the province, will handle approximately 250 metric tons of recyclable material per day.

Company officials are negotiating with brokers in southern Ontario to obtain a source of old corrugated cardboard.

Shisko says the mill could possibly take cardboard collected as part of a blue box program, but he admits that the volume would not be sufficient even if it included material collected in North Bay, Sudbury, Sault Ste. Marie and Timmins."

The finished product will be sold to the mill's existing customers through an agreement with Stone Consolidated.
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Title Annotation:Forestry Report; McMillan Bloedel Ltd.
Publication:Northern Ontario Business
Date:Mar 1, 1992
Words:560
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