History
At one time it was an Abitibi mill, used for research and development, but was sold to a private investor, Dan Alexander, who invested heavily in a new paper machine (#5). The company went bankrupt and was operated for several years by Ernst & Young. A private investor, Ron Stern, of Belgravia Investments, purchased the mill and made the facility viable with the assistance of the employees, the Ontario government and the Toronto-Dominion Bank.
The mill is now a major employer in Sault Ste. Marie. However in 2004 and in late 2005 due to the country's hardships with the forestry industry, many mills have been forced to close and lay off employees. This was the case with St. Mary's Paper which on December 14, 2005 announced it was laying off an additional 14 employees. In 2004 the mill laid off 50 employees to help with cost cutting initiatives.
In the year 2006, the mill operated with 380 employees. Furthermore, in 2006 the company announced a 20% reduction in pay for employees due to the forest industry's rising energy costs and lack of government support for the forestry industry in Canada. The company indicated that the pay reduction was intended to help avoid further layoffs and keep the Sault Ste. Marie paper mill in operation unlike many other mills across Ontario and Canada which had been forced to close during this timeframe.
On October 25, 2006, St. Mary's Paper announced that it filed under the Companies' Creditors Arrangement Act (CCAA) in Toronto. The mill was seeking protection due to bankruptcy and indicated its confidence that the operation could be restructured. St. Mary's Paper cited the high Canadian dollar and rising energy costs for its declaration of bankruptcy. The legislation that the company has filed under is the same legislation that Algoma Steel, a neighbouring manufacturer located in the same municipality, filed under in 2001. The mill continued operations and supply to its customers at the time of filing.
On February 19, 2007, Sault Ste. Marie City Council reported that they would forgive St. Mary's Paper's $386,000 in municipal taxes that were owing. St. Mary's wanted to have a much larger amount forgiven but Council advised that it was the best they could do. The agreement was conditional based upon St. Mary's ability to reach an arrangement with their unions by 20. February 2007 and continuing operations in Sault Ste. Marie.
No agreement was reached between St. Mary's Paper management in time and, consequently, in April 2007, the mill was completely shut down. The shut down caused the loss of an estimated 400 jobs in the community and was expected to have a negative impact on the city's economy.
However, in June 2007 the mill was reopened under new ownership and began making paper again for its customers in the United States. The mill called back 195 workers of its original workforce of 380 people to restart operations on paper machine No.5. Paper machines numbers 3 and 4 were intended to come back online by August 2007. This was inntended to cause the recall of most of the remaining workers who had not yet returned. The news of the mill's reopening was welcomed by the community.
On August 8, 2007, St. Mary's announced that all 3 paper machines were back online and almost all of the laid off workers had returned. Announcements were also made about the building of the cogeneration plant to help curb electricity costs for the mill. A joint venture with Essar Steel Algoma on this project was being considered to save on building costs.
St. Mary's Paper's mill is insured by FM Global.
On December 9, 2010 it was announced that St. Marys Paper is expected to be back in business this week, nine months after the mill suspended operations and sent 300 out of work. President Gord Acton confirmed the mill's workhorse paper machine No. 5 will "absolutely" be reactivated as early as today. "We're grinding wood, pulp, wood's in the yard, paper will be on the reel tomorrow or Friday," Acton said in a brief phone interview from his legal firm. He said officials were in the midst of drawing down financing Wednesday and new chief executive officer Dennis Bunnell was in Chicago talking to clients, "so we're just going crazy here." Bunnell, who was brought on board in July from Munksjo Paper in Massachusetts, has a history of re-starting out-of-service mills. His resume includes Newton Falls Fine Paper in New York state, which reopened in 2007 after being out of service for seven years. Acton said they could provide more information in the coming days, but said nearly all 200 workers who were laid off in March when No. 5 was idled will be recalled.
On December 30, 2011 it was reported that St. Mary's Paper went into receivership after losing its insurance. Documents on the website of receiver Ernst & Young state the Ontario Superior Court of Justice ordered that proof of sufficient insurance coverage was required by Dec. 30 to avoid the receivership order.
Read more about this topic: St. Mary's Paper
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