IP), GEORGE PETTY — Chalrman and chief Executive Officer of Repap Repap Chairman .and Chief Executive Officer George Petty has been described as a man who is the ‘‘glue that makes things ‘work’’, In describing Petty’s rise to success in the competitive world of international pulp and paper during an interview with the Terrace Review, Bill Vaughan, Vice-President of Marketing for Repap’s west coast operations said this and . more as he spoke of the com- pany’s founder and his effect on the . Northwest with obvious pride and respect. by Tod Strachan The son of an Irishman who emigrated to Canada following the First World War, Petty was ' born and raised in Montreal where he played some semi-pro -hockey prior to his graduation ‘from McGill University in 1954, According to Vaughan, Petty Started on the road to success after graduating from university _ by getting a job at Canadian In- *“ternational Paper (CIP), a sub- .,Sidiary of the. American owned . -company International Paper as. a trainee in the laboratory. Within ten years he became vice-president of pulp sales. ‘‘When he got into pulp sales,’? remembers Vaughan, _. ‘he rose quite rapidly.”’ Vaughan added that just prior ‘to his appointment as vice- president, Petty gained some in- ternational experience when he -was placed in charge of IP’s London’ office, where he was responsible for European pulp sales. On returning to Canada, Petty was made responsible for the original marketing work and the opening of IP’s Tahsis-Gold River operations on Vancouver Island as well as the Panama Ci- ty pulp mill in Florida. _ In the late sixties, Petty became interested in Penntech Paper Inc., asmall Pennsylvania hardwood kraft mill, which was at that time manufacturing paper for a major American magazine. When the magazine stopped production in 1969, the mill was scheduled to be closed but Petty organized a group of investors, threw in his own life savings of 12 to 15 thousand dollars, and became part-owner _of Penntech. ‘*His was mainly sweat equity, like when you build a house,’’ explained Vaughan, ‘“‘but they got the mill going and it’s still in existence,” Petty suffered a minor set- back in the early seventies when, because of his small equity in Penntech, he was forced out by the other shareholders. However, not a man to be held back for long, Petty purchased Penntech shares and according to Vaughan still owns about 25 percent of the company today. After leaving Penntech, Petty returned to Quebec to perform what many still call a miracle. According to Vaughan, IP had closed Tembec, a pulp mill they — Terrace Review — Wednesday, January 20, 1988 13 ~ George Petty: the driving force _ behind Repap and Skeena Cellulose owned in the small northern Quebec community of Timiscaming, about two years earlier and were about to dismantle the mill. “The townspeople were very upset because if the mill went, there was no town left,’’ Vaughan recalled. ‘However, the townspeople were quite bit- ter and they refused to let IP take the wood out.” Petty got the town, the union and the Quebec government together and convinced them to help him by investing money in the mill, Vaughan continued, and the mill was reopened. “That was a real miracle because the mill had been closed for so long and IP was fighting the re-opening,’’ said Vaughan. He remembered Kevin Drum- mond, the Quebec Minister of Natural Resources saying at the time, ‘‘If it wasn’t for George this wouldn’t have happened. George was the glue that put it together.’’ ‘“‘And that’s what George does,’’ said Vaughan. ‘‘He has the ideas and he’s the glue that makes things work.’’ “This made IP very mad because they wanted this mill dead and buried but it has been a very successful mill ever since. It’s had a lot of modernization and a lot of money spent on it, and Repap still owns about 13 percent, and George is still on the Board of Directors,’’ he said, In 1974, Tembec bought the N.Y., but a series of economic factors including high interest rates, a weak economy and an inefficient mill led to its closure in 1982, A more successful investment ‘made by Petty in 1974 was the Acadia Groundwood Pulp Mill in Nelson-Miramichi, New Brunswick, which he bought from the Jannock Corporation. The purchase included the mill’s provincial timber licenses and opened the door to international markets. In 1976, the Midtech Paper Corporation was formed to pur- chase a coated paper mill from the Kimberly-Clark Corporation in Kimberly, Wisconsin, and ac- cording to Vaughan this was the real starting point for Repap. New management was installed at the plant and a market study was initiated which resulted in the decision to expand the mill’s operations into lightweight coated paper. This decision committed a total investment of about $500 million (U.S.) over the following years and resulted in the construction of a new coated paper complex with state- of-the-art equipment capable of producing 135,000 tonnes of lightweight paper per year. Repap Enterprises Ltd. was formed in 1978 for the purpose of combining the collective pulp and paper assets of Petty and his associates under one corporate entity. A corporate reorganiza- tion in 1981 resulted in Repap owning Miramichi Pulp and Paper Inc., Repap Holdings” Inc., and a minority interest in Tembec. In 1985, Miramichi purchased the Newcastle Kraft Pulp Mill from Boise Cascade Canada Ltd. to further establish their New Brunswick base. At the same time, the 200,000-tonnes- per-year Miramichi Coated Paper Mill was built adjacent to the Newcastle mill. ‘‘This is the fastest and finest lightweight coated paper ma- chine in the world and the only one in Canada,’’ Vaughan said, “This machine is unbelievable when you see it; it makes 200,000 tonnes a year of the type of paper that goes into Time Magazine and McLean’s and the machine runs at 4,000 feet a minute. That’s about 50 m.p.h.!”’ ‘‘We at Skeena are very happy with this operation because it protects us in a down market. We'll have a place to ship our pulp because these mills have groundwood pulp but they don’t have any kraft pulp at this time,’? Vaughan said. -Midtech mill.in Niagara .Ealls, . i On July 10, 1986, Repap Cellulose Inc. acquired the Skeena Operations from Westar Timber which included two bleached softwood kraft pulp - lines, the Terrace sawmill and a tree farm license and forest license to supporting timberlands. Repap also purchased the sole rights to the ‘‘Alcell’’ process from General Electric recently, which promises the most up-to- date pollution-free pulp and paper operations in the world. The rest is recent history familiar to most local residents. In a recent visit to Terrace, Petty pointed to the $30 million saw- mill being built at the Skeena Cellulose site and announced his intentions to build-a major coated paper operation in Prince Rupert within five years if the free trade agreement is signed. “Over the next three to five years, if we have a free trade ar- rangement, we’ll be in a position to make the commitment to put in a new pulp mill in Prince’ Rupert along with a high value- added paper machine,” Petty announced in Terrace last year. He predicted a significant im- pact on the logging industry in the Northwest because of the Prince Rupert installation and with his record of successes over the past 32 years few doubt that prediction, or the fact that more money will be spent in up- continued on page 14 The Midtec Paper Corporation in Kimberly, Wisconsin, provides a guaranteed market for Skeena timber. 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