Even though the Terrace Bay Pulp mill in Ontario seems to have the perfect set-up, with an experienced workforce, one of North America's largest production forests in its backyard, and with a mill capable of cranking out a whopping 450,000 tonnes of pulp in a single year. Despite this, the mill is currently idled for a 6 week period.

Buchanan Forest Products took over the mill in 2006 when the operation was unable to make payments on about $80 million worth of debt.

According to documents that were filed in court last week the “state-of-the-art” plant was still in the black as recently as October. However, for the last 10 months the operation has been struggling to find a new source of funding.

The Toronto-Dominion Bank is currently Buchanan Forest Product's secured lender, and they have just issued a demand for a full debt repayment. In addition, Terrace Bay Pulp also owes Buchanan Forest Products $15.5 million.

The mill was idled on February 23 with about 66,000 tonnes of unsold finished product. Without a new investor, the mill is unable to market its inventory, and is unable to process an existing pile of logs and chips that has the potential to keep the mill's 400 employees employed for one month.

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Mill owner faces crisis (Chronicle Journal)