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Industry continues to thrive.

Recent hurdles not hindering industry, association president says

Ontario's forest industry remains a source of pride, a provincial forest industry group reports. Despite a slump in the pulp and paper markets and an ongoing softwood lumber dispute with the United States, the industry is as stable as ever and remains profitable and environmentally sound, Ontario Forest Industries Association (OFIA) president Tim Millard says.

"Obviously, one of the significant priorities for the lumber industry is continuing to wage our defence against the U.S. Lumber Coalition's application in the softwood lumber war," Millard says. "It continues to be a cloud hanging over the industry, but notwithstanding that, lumber prices have risen to a desirable level, and we're making money in the lumber business."

OFIA is a provincial trade association representing companies engaged in forest management in Ontario, as well as those that manufacture pulp, paper, paperboard, lumber, panelboard, plywood and veneer.

Members include most primary manufactures in the province, and account for about 70 per cent of the annual harvest.

Millard says the lumber market as a whole is doing well; sales are steady and production is being maintained.

The pulp and paper market, however, is not experiencing the same prosperity.

"Pulp and paper prices are at a significantly low level and predictions by the financial pundits are that they will continue to decline into the 2002 market," Millard says. "It is a dim prospect in terms of both pulp and paper prices."

But he says the pulp and paper and lumber markets have traditionally peaked in opposite cycles, Which explains the cur rent gap between the two markets.

Although companies, like newsprint producer Abitibi-Consolidated, have recently cut jobs in an attempt to remain competitive and efficient, Millard says it is not the norm throughout the entire industry and is likely not due to current market conditions.

"Abitibi's news, I think, is a reflection of an overall company evaluation that I don't think can be directly attributed to more recent market conditions," Millard says. "I think that was just the kind of consolidation that needed to take place in the industry."

A labour relations issue was also a key factor in Abitibi's decision to close down one of its two paper machines in Iroquois Falls, he adds.

Abitibi-Consolidated announced in May it would permanently shut down one of the newsprint machines at its Kenora plant in June. Two others are being idled until the fall.

The move was prompted by market conditions and increasing energy costs and affects nearly 500 employees; 147 jobs have been cut at the northwestern Ontario mill and 333 workers are out of work until the two remaining newsprint machines are restarted later this year.

In Iroquois Falls the company has decided to transform its mill into a single-machine newsprint, operation in September.

The company had originally hoped to gradually reduce the mill's workforce and asked for a no-strike, no-lockout agreement to 2010.

Three of the mill's four unions agreed to the restructuring program, but the fourth would not accept, leaving the company to instead decide to eliminate one of the mill's paper machines and cut 200 workers.

But Millard says Abitibi's situation is not a reflection of the current forest industry as a whole, which continues to thrive.

He says the industry is also achieving success in its attempt to become an environmental leader, adding that Ontario's forestry industry has historically been cautious of the environment.

"The overall outlook continues," Millard says. "We have a very strong forest industry in Ontario, and we're a thriving industry. We still have overall direct employment of close to 60,000 jobs and we have a net balance of trade of almost $4 bil-. lion, which is the second-largest net balance of trade next to the automotive industry."

"We're proud of our environmental track record. Whether or not we get group certification for Ontario's forest industry by the Forest Stewardship Council, I think there's a huge recognition there. We've done a lot with the creation of new parks and protected areas (under the) Living Legacy.

"On the manufacturing side, nobody has a better record in terms of improvements in water quality. If you look at our record over the past 20 years, we've done an amazing job in terms of particulate matter in air."

He says the industry will continue to work closely with its environmental regulators, and the environmental groups within the province, to sustain a high level of responsibility.

He says the industry also continues to make "significant progress" in creating and maintaining meaningful. relationships with First Nations groups throughout the province.
COPYRIGHT 2001 Laurentian Business Publishing, Inc.
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Publication:Northern Ontario Business
Date:Jul 1, 2001
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