See Update.

So much for giving the industry time to switch over to natural and organics. Guess they should've been in the sawmill business. Merry Christmas to the 100 workers at the plant.


P.E.I. hog plant closing
Last Updated: Thursday, December 13, 2007 | 2:23 PM AT
CBC News

Prince Edward Island's hog processing plant will close down at 5 p.m. AT on Thursday, the province announced at an afternoon news conference.

The closure follows years of financial difficulty, and what has been described as a crisis in the hog industry. Many producers have gone out of business in recent months, either by choice or forced out by debt.

Many were expecting an announcement of more government money for the plant, but instead it pulled the plug.

More to come

The government already invested 6 million dollars in the plant. I guess the sawmill should have been in the pork business.

So, you agree with the government intervention here, is that right?

Just askin'.

One's a federally inspected food processing plant with all the equipment that goes with it...the other is a half dozen old mechancial harvesters, aging trucks and clear cut land in the middle of nowhere.

http://www.gov.pe.ca/photos/original/pt ... _rep06.pdf

$100 m plus in farm receipts for the pork sector since 2002. Don't imagine the forestry sector generated that level of economic activity. Especially one sawmill.

No. I have no opinion because I do not know enough about the industry or the business, involved.

I do agree there are times for government investment in business. I prefer these to be based on sound financial policy, preferably involving loans, and not grants. Except in extreme cases, funds should be well supported by company assets.

Whether this deal meets all of these smell tests, I have no idea. The fact the investment was set up as a colateral loan, as opposed to a grant, suggests there is a liklihood that it is reasonable.

That is exactly my point Ed. A 'collateral' loan is a loan that can be secured by anything. If I have a tractor that is rusted out in the back forty and is buried in snow/mud/manure and my banker secures on it and registers a PPSA , it is technically a 'collateral' loan.If you borrowed money against this "asset"... I't will cost more to go find it and value it and repossess it than it is worth,, = write off... but damn it , it was a 'secured loan' by those who loaned your money as an investor..(tax payer)

Calico

Because he was too busy in today's media commenting on another loan that he didn't previously approve. The hog plant. "Don't do rescue operating loans"!

(Check your in-basket Mr Minister, an application needs your signature for one of your own)

Calico

My concern ... the sawmill is the second largest on Prince Edward Island .... where is the first??? CLOSED .... that is a business decision by the company ... closed till the industry rebounds ...

The Georgetown Timber even went so far as to find work for their workers.

Why are we taken a risk on a company that didn't make a solid business decision when they should have .. they stayed open because they needed the income to continue paying their debt .... it appears the income does not match the debt ... that is why the banks would not touch it ... and why we are now responsible for it.

Nova Scotia saw mill ... CBC article ....

The money-losing MacTara sawmill will stay in business for now, but most of its 160 employees will lose their jobs.

A court agreed Thursday to close the mill's lumber operation at the end of the month, while the pellet portion also faces closure if the company cannot find a source of wood.

Only the chipping operation will continue while the company negotiates a sale.

The partial shutdown is part of an agreement that protects MacTara Ltd., the biggest employer in Nova Scotia's Musquodoboit Valley, from its creditors until the end of March.

As the court hearing got underway Thursday, workers told CBC News they were not optimistic about the plant's long-term future.

MacTara owes $23 million to a number of creditors, many of them small businesses who supply the sprawling complex with wood.

One of those creditors, Keith Elwood, stopped wood shipments to MacTara earlier this week, saying he was afraid he would not be paid if the company went under.

Nevertheless, Elwood told CBC the sawmill is important to the area's economy and he hopes it continues to operate.

MacTara was granted a temporary reprieve from creditors in October. The company sought an extension, claiming it cannot afford to keep the mill completely open as it tries to sell the plant to a firm in Scandinavia.

The sawmill operation has been losing nearly $500,000 a month. The pellet operation is profitable, but the company doesn't have enough wood.

MacTara used to ship about 80 per cent of its lumber to the U.S.

But the company's prospects have plummeted as it struggles with a high Canadian dollar, a downturn in U.S. housing construction and an oversupply of lumber in the market.

*****

Heck if everyone else goes bankrupt maybe our money will be a good investment .... wonder how much money we will be throwing out to keep them afloat till that time comes ....

The hog industry is on the decline on PEI and without federal government help, it looks like it's going to be in serious danger. More and more farmers are getting out of the business. So I don't think it would be wise to invest anymore money in this plant unless there is federal help coming for hog farmers. The government has said they will operate this plant for a while, so really they are going to be putting more money into the business. But they just gave this company $200,000 in October with the company saying they were on the verge of getting more financial backing. But that obviously didn't happen, so they came back asking for the 2 million operating loan. What happened to that private financial backing??

While the province is no longer going to give money to this company to operate the hog plant, the government is going to operate the plant for a short time at least. They are also working on finding a private company to purchase the plant. Sounds like the government is doing what it can to help.

Island government continues to buck the trend.
What do they know that the rest of the world does not???



CBC N.B. <----Click here for link

Doh!

Could it be that there is no comparison?

The Arsenault Sawmill isn't in the pulp and paper industry, which has its own issues.

I really don't know the potential for Arsenault Sawmill , longterm. I would hope the government looked at that. But your failed logic, is like saying, coal mines lose money...close all mines (including precious metals).

I think I read that the Energy from Waste plant buys a lot more wood products now and much of it is from Aresnaults. Or maybe I saw it on Compass.

Anyway, I think the big problem with many of these sawmills closing is the high Canadian dollar. But the dollar has gone down and some predictions say it will level out at around the 85 cent mark. Maybe that would mean sawmills could be profitable.

Sawmills supply P&P plants with wood product in N.B. The sawmill's have quotas on wood lots -they call them a "limit". Sawmills are closing in a province which is far ahead of the Island in the Forestry industry. It is a bad idea to invest in this industry here on the Island when sawmills are closing across the province of NB, especially in the Northern part of the province, where mills have closed everywhere and the NB Liberals did not roll over and pay up like Island Liberals did.

Modern mills like Adrian Arsenault's mill (Balmoral NB) - one that just recently underwent a major refit - have been closed due to the collapse of the pulp and paper industry as well as the rapid decline in the price of wood as a construction tool due to a lack of demand - devalued dollar and improvement to recycling programs.

Your use of the "Duh" is unmistakably condescending in tone. I don't think you are qualified to speak to anyone in that that way. It makes reading posts where you get put down somewhat enjoyable.

If someone verifies that a major part of Arsenaults market is P&P I'll consider agreeing, but I've not heard that is the case from anyone, other then you.

I don't care if you agree or not.

I explained why I feel the liberal investment is a poor one and pointed out your rudeness.

I simply pointed out that P$P downturn does not necessarily mean a mill that is involved in lumber or wood chips, as example, may still be viable.

Unless someone can show that the major business of Arsenaults is in raw supply of harvested trees for the P&P industry, then I stand by my comment re: failed logic.

Blanket statements are not always valid. For example, I might consider investments in local pigs as foolish. but crops for biofuels as viable, therefore I would not support a statement that all investments in farms is foolhardy.

Too blanket a statement.

Being from a P&P town in New Brunswick, I will agree that many (most even) supply P&P, but for many also, their sole or primary business is cutting and prepping wood used in the building trades.

Most sawmills supplying P&P are owned by the P&P company. Independant sawmills supplying P&P are supplying the shortfall of company owned sawmills and naturally bear the initial brunt of a downturn in P&P business, followed by the company owned sawmills.

To make a short story long...many private mills have control of the limits, which plants do not own or control. In many cases, they help supply the mills.

If the forestry industry was healthy, these mills supplying P&P plants would switch over to lumber production. They are not. Why? Because the demand is way down for that product for many reasons and they are closing shop.

Adrian Arsenault Mill in Balmoral N.B. was in lumber production. He had stopped supplying P&P mills a few years ago - he was losing money. He refit for lumber production but with the export duties and decreased demand for Can. lumber, he closed several years later.

What advantage would an Island mill possible have over these larger mills in N.B. who are closing? None. Except political favoritism.

Unless the Liberal govt. here on PEI is seeing an upturn in the lumber industry, it is a bad investment. In other words, - get ready for it - Polar Foods.


Sounds like a "blanket" implication that being from a mill town means you might know more about the subject. It very well might prove to be true in this case, but it is still "blanket", don'tcha think?