Tag Archives: Thunder Bay Fine Papers

Once again, dangerous chemicals have been left behind in a closed paper mill with no power, no heat, and with winter approaching.

This time it is the Cascades/Thunder Bay Fine Papers/Superior Fine Papers mill in Thunder Bay, Ontario.

History of the Mill

The paper mill is 90 years old and sits on the shore of Lake Superior in Thunder Bay.

Cascades operated the mill from 1993 until 2006 when the company decided to close the mill due to unfavourable economic conditions.

The mill was purchased by Thunder Bay Fine Papers in 2008 for $1. With $45 million in government grants, loan guarantees, investments from local investors, and even $4.5 million from Cascades who decided to contribute to the mill’s start-up costs, the mill restarted in 2008.

The triumph was short lived. After operating for less than 3 months, the mill was idled.

A receiver took over the mill in October 2008, and Thunder Bay Fine Papers evaporated, leaving local business owed over $3 million. A local group of investors joined together to form Superior Fine Papers, and purchased the mill back from the receiver early in 2009, just as it was about to be sold for scrap to a recycling company.

Superior Fine Papers purchased the mill for $2.75 million. $750,000 was paid on closing, and the remaining balance was made payable by a promissory note for $1.75 million, repayable 6 months after closing by a vendor-take-back mortgage.

In July 2009, the Ontario Ministry of the Environment notified Superior Fine Papers, and the former owners of their facility – Thunder Bay Fine Papers and Cascades, that they were required to make immediate repairs to the mill’s industrial sewage works. They were concerned with a crack in the berm wall of the lagoon that could allow sludge and waste water to enter Lake Superior.

Superior Fine Papers, Thunder Bay Fine Papers, and Cascades jointly launched an appeal against the work order.

Why did all 3 companies appeal the environmental work order?

Cascades Fine Papers argued that it was no longer responsible for the Facility, having sold it almost two years prior, and subsequently paying Thunder Bay Fine Papers $500,000 to discharge Cascades Fine Paper’s responsibilities in relation to dredging the lagoon. And their parent company, Cascades Inc., claimed they were not responsible because they didn’t own the mill, Cascades Fine Papers did.

Superior Fine Papers argued that they could not take care of any environmental concerns because they did not have the financial ability to pay for any of the work.

All of Thunder Bay Fine Papers assets were distributed when the company was bankrupt, so no funds would be available for the environmental clean-up.

Environmental Tribunal Decision

An environmental review tribunal decided in May 2011 that the environmental concerns of the idled Thunder Bay Fine Papers mill are the responsibility of its former owners: Superior Fine Papers and Cascades Fine Papers Group.

The tribunal found significant environmental risks at the site, in particular:

• threat of breach of the berm
• possibility of another fire in the bark pile
• presence of significant volumes of dangerous chemicals both inside the mill building and in outdoor storage tanks

Until these risks are permanently addressed, the electricity must be kept on, and two security guards must secure the site at all times.

Superior Fine Papers says it can’t pay

Superior Fine Papers said it wasn’t purposely not complying with the orders from the Ministry of the Environment, but they were not in a financial situation to comply. The power company would not reconnect their electricity without a financial guarantee, the company could only afford one security guard, and the company was not in a financial position to hire a consultant to carry out the environmental orders.

Superior Fine Papers said they are not able to sell their assets to pay for the environmental clean-up because they still had a mortgage on the property for $1.96 million.

Even if the mill was sold for scrap (estimated to be worth $3.5 million in scrap metal), the Director’s orders requested the company to contribute $5 million in financial assurance towards the clean-up, so they would still not have enough money.

The environmental tribunal in May 2011 discussed that while Superior Fine Papers was crying poor, it had received nearly $700,000 in tax rebates from the city of Thunder Bay, and had spent only $100,000 of that money on environmental clean-up.

The Truths behind Superior Fine Papers

The Director of the Ministry of the Environment said in May 2011 that there was no way it was going to let Superior Fine Papers off the hook for all the environmental clean-up responsibilities just because it said it was too poor.

And here are some of the reasons why:

• Superior Fine Papers is a company backed by sophisticated business people who have loaned it a total of roughly $2.1 million (yet all remain anonymous)
• These business people were investors in Thunder Bay Fine Papers and, therefore, well aware of the environmental issues associated with the site and with the business risks associated with the business
• Andrew Sinclair, President of Superior Fine Papers, while working for his father’s company EKT90, did work on the mill for Thunder Bay Fine Papers to make the mill operational again
• Andrew Sinclair was then himself CFO of Thunder Bay Fine Paper for a brief period before it went into receivership, and therefore presumably aware of the financial risks associated with the business
• The Sales Information Package prepared by the receiver for Thunder Bay Fine Papers, highlights the environmental risks associated with the Site and emphasizes that the site is to be sold “As is, where is”
• The Sales Information Package refers to a Phase I environmental assessment report, yet Superior Fine Papers never requested a copy of the report prior to purchasing the site and, apparently, never did any environmental due diligence of its own, despite its knowledge of the environmental issues on the site.
• Superior Fine Papers own business plan highlights environmental risks associated with the site and notes the failure of the two previous owners of the mill – Cascades and Thunder Bay Fine Papers – to make money running the mill
• Superior Fine Papers purchased the mill and associated assets on an “As is, where is” basis, knowing that it needed a further $35 million in financing to resume operations, and knowing that it did not have sufficient cash in hand to address the environmental problems on the site, even by its own estimates
• Superior Fine Papers did stand to gain financially if it managed to make a go of the operation

What are Cascades Responsibilities?

Cascades, as former owner of the site, has been ordered to:

• Remove the bark pile waste and restore the site in that vicinity
• conduct the geotechnical assessment and monitor the Lagoon berm until this assessment has been completed

Cascades was not required to provide money as financial assurance the work will be completed because the tribunal found no reason that would suggest Cascades would not comply.

Cascades was found to be not responsible for maintaining the site now, including the electricity and security. Cascades removed all hazardous chemicals from the site before selling the mill to Thunder Bay Fine Papers.

And Now What?

It’s been over two years since the environmental orders were issued to Superior Fine Papers.

After an extension had been given, the chemicals were to have been removed from the Superior Fine Papers site by October 31, 2011 but the Ontario Ministry of the Environment said this has not happened.

“This in fact is a very serious matter,” said Lisa Brygidyr, spokesperson for the Ministry of the Environment.
“Its especially worrisome with winter temperatures arriving soon. If they are in portions of the mill that are not being heated, there is a concern if the chemicals freeze, the containers could crack and there could be a spill,” she said.
“The chemicals need to be removed in order to protect a risk to the environment and to Lake Superior.”

Last year the buildings storing the chemicals were heated through the winter.

The Ontario Ministry of the Environment is currently evaluating the current options and repercussions for Superior Fine Papers for not cleaning up the site. Brygidyr said it is possible the Ministry will put out a tender for cleanup, and will give the bill to Superior Fine Papers.

Sources:
Previous ForestTalk.com coverage of Thunder Bay Fine Papers
Previous ForestTalk.com coverage of Superior Fine Papers
Response to Superior Fine Paper’s Appeal to the Provincial Officer’s Order – July 24, 2009(link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – September 11, 2009 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – November 10, 2009 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – November 23, 2009 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – December 10, 2009 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – December 22, 2009 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – April 26, 2010 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – May 20, 2011 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – August 25, 2011 (link)
Cleanup incomplete (TbNewsWatch)

An environmental review tribunal has decided that the environmental concerns of the idled Thunder Bay Fine Papers mill are the responsibility of its former owners: Superior Fine Papers and Cascades Fine Papers Group.

Both of the former owners had argued at a hearing last June that they were unable to afford to meet the required environmental conditions. The tribunal did not find enough evidence to support that claim.

When the Thunder Bay Fine Papers site was inspected in 2009, several issues were found, including a crack in a lagoon berm near Lake Superior.

The companies now must hire qualified professionals to identify and address the environmental concerns. A financial assurance obligation of up to $3 million must be met for cleanup, but that doesn’t include hiring the professional or the work that will likely be required to fix the lagoon.

Security must also now be provided for the site, and electricity must be restored. Because chemicals are still being stored at the site, the buildings must also be heated.

Read more:
Cleanup responsibility (TbNewsWatch)

Vandals have caused tens of thousands of dollars of damage at the idled Superior Fine Papers (formerly known as Thunder Bay Fine Papers).

A security guard reported the break and enter around 3am yesterday morning.

Police found broken glass, and damage to office equipment including many computers.

A trail of blood was found inside the building, but the injured vandal(s) was not found.

Police have not determined a motive, and nothing appears to have been taken from the plant.

Sources:
Vandals trash building (The Chronicle Journal)
Break in at Fine Papers causes major damage (TbNewsWatch)

In July, the Ontario Ministry of the Environment (MOE) notified Superior Fine Papers, and the former owners of their facility: Thunder Bay Fine Papers and Cascades, that they were required to make immediate repairs to their industrial sewage works.

The MOE was concerned with a crack in the berm wall of the lagoon that may allow sludge and waste water to enter Lake Superior.

Right now the water levels are low and there has been no discharge, but when the higher waters come in spring, there will be potential for a spill over.

Superior Fine Papers has conducted some work at the site but have not yet met the directions of the MOE’s work order and fines may be levied.

Now, Superior Fine Papers, Thunder Bay Fine Papers, and Cascades have jointly launched an appeal to the Ministry of the Environment against the work order.

Officials from Superior Fine Papers had no comment on the situation.

Source:
Fine Papers appeals MOE order (TbNewsWatch)

The recently idled Thunder Bay Fine Papers mill located in Thunder Bay Ontario has new life under the banner of Superior Fine Papers Inc. The mill which had previous lives under the Provincial, Abitibi and Cascades banners will move forward again under this new SFP banner. For the community, this is a breath of life returning most of the former jobs and countless spinoff jobs to Thunder Bay, at a very opportune time.

The new leadership under Jay, Andrew and Dan Sinclair worked tirelessly over the last few months to make this dream a reality. Former Shareholders of the mill have also stepped forward and provided their support to the project.

The start date for operations has not yet been set, but a spokesman said that it would be a matter of weeks as opposed to a matter of months.

The mill had invested in excess of $20 million dollars in upgrades under the TBFP banner and this will serve the new company very well. Double coated products as well as other machine enhancements and speedups will make the products out of SFP second to none in the coated paper industry. SFP will now be the only Coated free sheet mill in Canada and is well positioned to serve the North American market.

The veteran sales team comprised of Marc Goguen, Bob Best and David Hunter have all stayed committed throughout this process and are very optimistic of the mill’s opportunities and niche grade structure. “The market is always ready for great products at the right place and the right price”, says Goguen, VP Sales and Marketing, “and we are in the process of talking to customers about this right now. The reaction has been overwhelming. In fact we have letters of commitment from our key customer base in excess of 90,000 tons, which is roughly half of the mill’s output; we are all overwhelmed by the support.”

John Hitchman the VP of Operations for SFP is also very keen on the mill’s prospects. “The machines are ready to roll and all we need is a few weeks to get the Supercalendars ready and run some paper” says Hitchman who had been with the mill in the 1970’s and 80’s is well seasoned and ready to lead this production team.

SFP acknowledges and thanks a myriad of people for their support; the City of Thunder Bay, the Ontario Government, the MNR, the 4 unions and our many customers throughout North America.

Superior Fine Papers will be making known brands such as Jenson Plus, Thunder Gloss and Route 88 as well as host of coated and non coated postal reply card products. The mill also plans on introducing several niche grades that can respond to recent market demand.

Source:
Marc Goguen
Vice president, Sales and marketing
Superior Fine papers

Any one have a few extra million laying around?

The Cascades/Thunder Bay Fine Papers/Superior Fine Papers mill in Thunder Bay is eager to reopen (again) and needs more money to make that happen.

The mill’s anonymous group of local investors have purchased the mill back from the receiver Deloitte Touche for an undisclosed price.

Dan Sinclair, board member and interim vice-president of Superior Fine Papers (the new owners) emailed the Thunder Bay Chronicle Journal newspaper from Florida to tell them that “after months of hard work . . . the mill has been saved”.

The mill was salvaged just as Deloitte Touche was seeking approval to sell the mill to a recycling company that intended to scrap it.

Sinclair said the investors include individuals who were previously silent cash investors in Thunder Bay Fine Papers, as well as contractors who were owed money when Thunder Bay Fine Papers failed to pay its bills. (Local Thunder Bay companies are owed about $4 million.)

The group’s intention is to reopen their mill, create jobs, and have a positive effect on the economy of Thunder Bay.

And they only need $35 million now to make that happen.

Thunder Bay Fine Papers purchased the closed paper mill from Cascades, and then reopened using private and public sector investments worth about $45 million, including $16 million in grants and loan guarantees from the province of Ontario.

A glut of inventory and a lack of customers forced the mill to close on July 11.

How another $35 million will get them a market for their product is not known at this time.

Source:
City fine paper mill saved (Chronicle Journal)

Thunder Bay Fine Papers is for sale.

The receiver the business, Deloitte & Touche Inc., is inviting offers for the purchase of the paper machines, office space, inventory, machinery, and equipment of Thunder Bay Fine Papers. The three production machines are capable of producing 200,000 tons of coated paper annually.

Deloitte and Touche Inc. is especially interested in finding parties interested in purchasing all or most of Thunder Bay Fine Papers – including its real estate (200 acres), paper mill, office space, inventory, machinery, and equipment. If not, offers for the individual assets will be considered.

All offers must be received before November 28th, 2008.

For more information:
Invititations for Offers to Purchase Business and/or Assets of Paper Mill (.pdf)

Just earlier today we were discussing how much Thunder Bay Fine Papers owes, to several different companies.

This afternoon a Toronto court has taken ownership of the mill away from the current management and will be placing it in the hands of a receiver.

Security was increased at the mill this afternoon, as a temporary measure, following the decision to remove control from the current management.

The request for a receiver was registered by CIT Business Credit of Toronto, Thunder Bay Fine Papers’ largest secured creditor. They are owed over $14 million.

Receiver Bob Bougie of Deloitte and Touche said he will now start the process of tying to find a new buyer for the operation.

The process of finding a new owner for the mill is one that will most likely take a very long time.

Heat at the mill has been turned back on in an effort to protect valuable equipment from the cold.

Source:
Receiver takes control of Thunder Bay Fine Papers (TBSource)

Thunder Bay Fine Papers is being sued for unpaid bills that total over $2.6 $3 million.

The mill stopped operation in July of this year, due to excess inventory and a lack of customers.

President and Chief Operating Officer John Hitchman said in September that Thunder Bay Fine Papers needed an injection of $10 million or it would have to shut for good. On Oct. 8, Hitchman announced the company had raised the $10 million and startup would happen.

Hitchman says that all these lawsuits will not affect his reopening the mill.

Here’s some of what Thunder Bay Fine Papers current owes:

• EKT 90 Inc., a supplier and installer of industrial material, is owed over $1.2 million for equipment, materials and labour supplied from the end of January to late August.
• Fairbarn‘s Machine Shop claims $569,000 for work done from March to July
• Peterson Electric‘s claim of almost $428,000 is for supplying and installing electrical materials between the end of January and mid-July.
• Sacchetti Construction employees finished work in mid-July. The general contractor says it hasn‘t been paid for almost $338,000 in general demolition, reconstruction, and miscellaneous carpentry and concrete work. Sacchetti’s suit also names CIT Business Credit Canada Inc. as a defendant.
• Dynamic Painting, says in its statement of claim that it had been hired by ABP Constructors to do painting and cleaning work at the Thunder Bay Fine Papers plant. Court documents say the company did $126,000 worth of work, but was only paid about $56,000, with another $70,000 outstanding.
• Canadian Stebbins and Engineering is owed $400,000 for labour, engineering services, and materials that they provided.

Each of the companies are asking the courts for a lien on Thunder Bay Fine Papers property.

Thunder Bay Fine Papers resurrected a closed Cascades paper mill earlier this year. The provincial government, and a group of local investors, put together $45 million to purchase and open the mill.

The provincial money included $1.5 million from the Northern Ontario Heritage Fund, $1 million from the Forest Sector Prosperity Fund and loan guarantees of $12.7 million.

Does anyone, other than John Hitchman, still believe this mill will ever reopen? Leave a comment (anonymous if you prefer)

Source:
Firms claim mill owes $2.6 million (Chronicle Journal)

Updated:
Updated with more unpaid bills for supplies and services.

Previous ForestTalk Coverage
Thunder Bay Fine Papers secures the $10M it needs to open! (Oct 9, 2008)
Thunder Bay Fine Papers needs $10 million now (Sep 24, 2008)
Production won’t resume at Thunder Bay Fine Papers on Monday (Aug 23, 2008)
Thunder Bay Fine Papers extends shutdown for the 2nd time (Aug 11, 2008)
Thunder Bay Fine Papers extended shutdown (Jul 28, 2008)
Thunder Bay Fine Papers has a new President (Jul 17, 2008)
Thunder Bay Fine Papers – 2 week shut down (Jul 16, 2008)

Thunder Bay Fine Papers president John Hitchman said the company has secured $10-million that it requires to get the mill back in operation. Most of the $10 million will come from private American investors.

John Hitchman wouldn’t commit to reopening on a specific day – but said the mill will be opening in the near future.

“It’s not as easy as one, two, three,” he said. “It’s complicated. There’s a lot of things we have to revisit.”

First they need to contacting employees to find out who is ready and able to return to the mill. The company also needs to have operating materials shipped in.

The mill will employ about 320 people once it can return to full operations.

Source:
Thunder Bay Fine Papers secures $10M: Hitchman (TBSource.com)