From front A2 - The Terrace Standard, Wednesday, June 23 1999 Proving critics wrong The pulp mill has cut its cost of production by about 560 a tonne and has set pro- duction records, Stecle said, Even the Vancouver office cut costs by $14 million over a year and a half, most- ly by cutting more than half of the staff there. The cast reductions, coupled with price increases of pulp and lumber resulted in what he ‘called a “dramatic run’? to the point where all company opera- tions recorded a profit in February, March and April. Company plans to spend $95 million in new capital investment, mostly at the pulp mill, over the next two years should result in it bec- oming one of B.C.’s lowest cost producers, Steele predicted. The move will re-start the company’s second pulp line, creating an estimated 150 new jobs at the pulp mill and 350 in the woodlands from Terrace to Hazelton. Steele said the company will use $3.6 million from its expanded working line of credit to purchase two new drying kilns —- one at the Terrace sawmill and one at Carnaby. That’s to satisfy an in- creasing need to supply kiln-dried = lumber to customers, Steele said. Another $16 million is to be spent building logging toads so there’s enough wood to feed the mills. Steele cut the capital ex- penditure program down from an originally envi- sioned $170 million to $110 million, but adds the $60. taillion cut out will eventually need to go abead. That would happen at a later date as the company’s cash flow improves, he said. “We didn’t feel we could afford the interest payments at this time,’’ Profits likely didn’t con- linue inlo May, Steele said, because of trouble with a SCI looking for more ways to cut costs ALTHOUGH COSTS are down, profits are improving and a modemization program is going ahead at Skeena Cel- lulose, company president Bill Steele stilf wants more. He said the company will still push for further cost reductions, adding he wants to achieve a further $5 to $6 per cubic metre reduction in the costs of the wood delivered to mills, ‘“We want to be at the bottom, in the lowest cost group in B.C,,” Stecle said last week. “It’s going to be even tougher to take the next layer of costs out. We will look anywhere for cost reductions.”* That could mean transportation, logging, road construc- tion and other operations, Steele said. Steele hopes much of the logging cost reduction could come through requests for stumpage system changes that would better reflect the high proportion of decadent, or rot- jten, timber in the northwest. Steele. said he. recognizes 1 oggers have already taken & ‘hit. “Tt is not our intent to push any one of our contractors into a position where he can’t make money,’’ Steele said, adding SCI needs its partners to remain in business. 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