A12 - The Terrace Standard, Wednesday, April 29, 1998

- Skeena community ownership floated

COMMUNITY _ ownership
of Skeena Cellulose may be
the best way to ensure the
survival of the company,
president Bill Steele said
Thursday.

Steele, speaking to a
packed luncheon meeting of
the Terrace and District
Chamber of Commerce,
called on people throughout
the region to start thinking
about that possibility.

“T think it's a good idea
because I believe that it
would secure the long-term
future of the operation ta a
better degree than the histor-
ical ownership has done,’
Steele said.

“Today I’m just throwing
out the idea. Next week it
may be something I have to
work on. I’m just not sure
when we have to do that.””

He noted that the present
owners — the provincial
government and ihe TD
Bank — are interested in
unloading the company as
soon as possible,

If the operations were
simply sold to another pulp
company, he added, the
mills here might find them-
selves in the same
deteriorating situation as un-
der the ownership of Repap
Enterprises, when profits
were siphoned out to more
profitable ventures rather
than being reinvested in
equipment here.

“Communily efforts into
ownership really only have
come out of a desperate
situation when no company
has stepped forward to con-
tinue with the operation of
ailing mills,”’ Steele said.

“In my view ailing mills
exist because large corpora-
tions look at how fast a
return we can get on the

Mayors
want
more

Sern amet nthe Te a

done:

NORTHWEST MAYORS
are urging the province and
TD Bank to Joosen up the
purse strings for Skeena
Cellulose.

Terrace mayor Jack Tal-
stra said the fear of the
mayors is that pulp prices
will soon rise to profitable
levels but Skeena Cellulose
won't be in a position to
take advantage of that prof-
it,

That’s because staying

within the $120 million op-
erating line of credit means
the company must keep in-
ventory at minimum levels
and not build any more
roads than absolutely neces-
sary.
Skeena Cellulose presi-
dent Bill Steele last week
suggested pulp prices,
which had languished
around $500 to $550 per
tonne, are on the rise and
will pass the $600 mark by
early June.

“Our concern as mayors
is that when pulp prices
reach that figure of $600 or
more per tonne, that this
company is in a position to
take advantage of those
prices,’’ Talstra said.

“There’s no road con-
struction going on now. The
chips may not be there for
delivery to the pulp mill so
pulp can be bought at those
high prices.’

Talstra said it’s fine to
debate the major investment
in Skeena Cellulose prior to
it happening.

But he says the province’s
money is now in and it
might as well make sure it
gets the benefit of that.

“They put so much
money into this thing, for
goodness sake don't quit at
exactly the wrong time.”

The last time the pulp
cycle went up and the indus-
try was very profitable,
Skeena Cellulose missed the
boat because of a strike at

the pulp mill in Prince

Rupert.

Talstra said not putting the
necessary money im now
would amount to the same
thing, only this time with
the company’s owners
shooting themselves in the
foot.

Se te ae fee

short term for money in-
vested,”"

But when operations have
high wood costs and high
labour costs, he said, they
often don’t compete well on
the balance sheet with oper-
ations elsewhere,

“If you’ve got a weak
Sister, the weak sister
doesn’t get the money. And
it appears that this has been
a weak sister in the recent
past.’”

Steele said he discussed
the idea of commuity

ownership with northwest
mayors from Prince Rupert
to Houston who met with
him here on April 19.

Those discussions have
been informal so far, he
said, but added he wants to
pursue them further.

‘We have ta develop
more knowledge about it
and how it could be imple-
mented,”? he said. “We'd
have to understand how
many of our communities
and how many of our people
would be interested in pur-

suing it further.”’

Any new owner would
have to be committed to
rebuilding the operations, he
said.

That means a huge com-
mitment at the pulp mill in
Prince Rupert, but also
money to be spent keeping
up the higher-tech sawmill
in Terrace, and making the
Carnaby and Smithers mills
more efficient.

‘When we look al the
ownership of the operations
in the past 10 years, overall

the Skeena Cellulose divi-
sion made money and had
money been put back into
the operations at a rea-
sonable rate, we wouldn’t
be in this situation,’’ Stecle
added.

Terrace mayor Jack Tal-
sira said he’s not yet sure
what Steele’s vision for
community ownership is.

“IF he means that the city
buy and own the sawmill
and operate it, that’s very,
very difficult. In fact, I

probably wouldn’t recom-

mend that concept to the
taxpayer,”’ he said.

“You can play with your
own money at high risk but
you cannot play with the
taxpayers’ money at high
tisk. That would be just ir-
responsible on the part of
any community leader.”’

He didn’t rule owt discus-
sions between northwest
communities and native
groups to determine what
might be possible, however.

“You have to be careful
when private enterprise

starts talking about com-
munity ownership. You im-
mediately have to be care-
ful.’’

On the other hand, Talstra
said, the community owner-
ship idea has also been
voiced by aorthern develop-
ment minister Dan Miller,
adding that could signal
some intent on the part of
government.

“Maybe this is the game
plan. If this is the game
plan, then it bears at least
looking at,’” he said.

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