Statement from St. Mary's Paper

St. Marys Paper is going to resume production of supercalendered paper early in December says its Chief Executive Officer Dennis Bunnell.

At a joint news conference with Sault MPP David Orazietti this morning Bunnell talked about expanding markets for the product, which is St. Marys' base product.

He also said the company's new business plan is based on a Canadian dollar at or near par with the American dollar.

When the mill reopened under local ownership it was with a business plan based on a 95 cent Canadian dollar and when the dollar rose, the market fell and the mill had to cease operations in March of this year.

The shut down was total and now it's going to take considerable effort and expense to restart the mill, says Bunnell, but he didn't go into detail about what exactly would be required for the restart.

He did talk about a plan to partner with University of Toronto, a local First Nation and the Sault Ste. Marie Innovation Centre.

These partnerships would develop new technologies on site at the mill and allow it to take advantage of an expanding forest bio-mass industry, he said.

The full text of a release from St. Marys Paper Corp. follows.

************************* SAULT STE. MARIE, ON - This morning's announcement at a joint press conference by David Orazietti, MPP and St Marys Paper Corp. officials has provided a much needed shot-in-the-arm to the local economy and forest industries.

Following Mr. Orazietti's announcement of support in the form of an $8.8 million dollar loan, Dennis Bunnell, Chairman and Chief Executive Officer of the Sault Ste. Marie, Ontario, groundwood pulp and paper mill, expanded on the news and expressed his gratitude.

"This is important news for St. Marys, and for the local economy," Mr. Bunnell said, "It is only with the assistance and support of our local MPP David Orazietti and Honourable Minister of Northern Development, Mines and Forestry Michael Gravelle, that St Marys Paper will be able to open its doors to begin production of supercalendered paper in early December. I urge members of the community and people who rely on the mill for their employment to recognize the personal commitment of these dedicated officials who worked tirelessly to assist us not only in our return to papermaking but to entering a new era of bio-economy here in Sault Ste Marie. Many Provincial government employees worked very hard to help us during this process. We are grateful to them for their dedicated service."

"Our market studies confirmed that St Marys Paper should continue producing supercalendered paper as its base product" Mr. Bunnell noted. "As a result of the Provincial support we can now implement our plans to transform the business by joining the expanding forest bio-economy business sector."

Using its forest bio-fibre supply, access and experience as the base for transition, St Marys is planning long term bio-economy projects, including a 35 MW biomass co-generation plant and a wood pellet plant.

The company also will engage in nano-technology product development partnerships and studies with the University of Toronto, and other bio-economy projects with private sector partners and the Sault Ste Marie Innovation Center.

"We are in the right place at the right time, with solid experience to boot," said Mr. Bunnell.

The company will be calling back employees as soon as possible and will start up forestry operations to supply the mill immediately.

Raw material supply and contracts will be finalized in November to have all necessary products and equipment in place.

A meeting is being scheduled to share plans with all employees.

"The future of our mill is tied to the people in our local community and our industry. I want to personally thank our employees, contractors, suppliers and customers for being patient as we took the time to develop a conservative, workable business plan. We look forward to renewing our relationships with all of the people and businesses that are so critical to St Marys' success."

History of the mill

"Sharing our resources and strengthening our community" has been the motto of St Marys Paper, however, the 115-year-old Company was forced to curtail operations in March 2010 due to deteriorating market conditions.

Rather than resorting to bankruptcy protection the decision was made to conserve funds to allow the Company time to develop a new business plan that would provide its employees and the communities it supports with long-term employment sustainability and security.

Leadership planned the shut-down of the specialty paper manufacturer's three paper machines to permit an efficient re-start.

SMPC has traditionally marketed its product to magazine publishers and advertisers who produce inserts, flyers and catalogues.

When full operations are possible, the company employs approximately 300 employees, and is directly and indirectly responsible for over 2,000 jobs in Sault Ste Marie and surrounding areas.

************************* Earlier SooToday.com coverage of this story

St. Mary's Paper to re-open with $8.8 million from province