tee eoeeeneed a es _ possible biiyer Enron Corp.’ Regional economy doing much better than in past years THE NORTHWEST forest industry is a lot healthier than il was a year ago thanks to im- proving markets and much-needed capital rein- vestment. The past 12 months have been as tumultuous as any in recent years, but on balance the out- come has been positive. A year ago the northwest was still waiting and lobbying for the release by Victoria of money to help Skeena Cellulose modernize its Prince Ru- pert pulp mill -a key to reducing the company’s costs and improving its bottom line. Last May the province came through and con- firmed it would allow SCI to spend-all $110 mil- lion promised during the company’s court-admin- istered restructuring. That move put 500 workers back to work in the bush by late fall preparing to feed the pulp mill’s B line that had been shut more than a year. Extensive work on the B line was Carried out through fall and winter culminating in the restart of the second pulp line last December, Further work is scheduled for June. SCI moved to its full production of 1,250 me- tric tonnes of pulp per day just as pulp prices were soaring. Pulp had languished as low as US $450 per tonne but is now pushing close to $700. Analysts expect prices to continue to climb and should remain high for at least 18 months. SCI, which already began to turn a profit in 1999 prior to the B line restart, is forecasting solid profits this year, which company president Bill Steele hopes to channel into further capital werk aimed at making the mill a low-cost produ- cer. High pulp prices even mean a possible wind- fall for the creditors of Repap B.C., who accep- ted a minimum 10 cents on the dollar when the SCI predecessor collapsed. Those creditors, who include northwest log- ging contractors and suppliers, stand to get an extra five to 10 cents on the dollar each year if SCI sells its pulp for an average of US $625 or more, That level is considered certain to be reached this year. Rising pulp prices made SCI's outlook steadi- ly rosier, to the extent that the province walked Il was widely considered the Enron’s bid: was a low-ball offer and that the province would do considerably better entertaining new offers in 2000. By spring those offers had begun to arrive, al- though there’s been no word on who the suitors are or how advanced talks are. While things looked up for SCT - forestry employer and the northwest industry linchpin, others still struggled. Forwest Veneer blamed bad markets for its decision to lay off 20 workers and mothball its 18-month-old Terrace veneer plant. West Fraser laid off 45 workers when a fed- eral work share program ran out and the impact of running just one shift since mid-1998 set in. That was about half the number of pink slips feared, West Fraser managed to keep much of the operation running by custom chipping for SCI, although that move in turn silenced Don Hull and Sons’ contentious Terrace chipper. The fallout of the West Fraser mill slowdown was that its loggers faced the prospect of virtual- ly no work for the foreseeable future. That problem was eased by an economic plan brokered by the Job Protection Commission that allowed West Fraser contract loggers to log off- shore timber and sell it for export. The carefully controlled program was de- signed to aliow only as many logs be exported as were required to subsidize sale of the rest on de- pressed domestic markets. The Job Protection Commission has extended the log export program through 2000, The northwest industry entered 2000 on a shock, learning early in the year that major indu- stry players have been secretly negotiating for months with Greenpeace, the Sierra Club and other groups towards a possible 18-month logging moratorium in many valicys on the central and north coast. The truce would end pressure on the signatory firms from boycotts in overseas markets if they agree to halt logging in key valleys while further talks proceed about the long term future of log- ging on the coast. The move stirred up alarm in coastal commu- nities, and has thrown up questions about whe- ther the direct talks could supplant work towards, away.in. November,from. six. months. of. talks. wlth. a, landsuse.consensus under the Kalum: sLandand Be eat! 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