Less than two weeks after announcing plans to shut down its Boyle sawmill indefinitely, Edmonton-based Millar Western Forest Products Ltd. said Tuesday it is in “advanced discussions” to sell the mill and its timber quotas to Northland Forest Products Ltd. of Fort McMurray.
The terms of a transaction are not final, and details will only be made public if and when the companies reach a definitive agreement, Millar Western said in a news release.
The talks don’t alter Millar Western’s plans to shutter the Boyle operation, putting more than 90 employees out of work.
“This development does not affect the phased shutdown of Boyle, so we are going to proceed with that as previously announced,” Louise Riopel, communications manager at Millar Western, said in an interview.
Howard Ewashko, president of Northland Forest Products, said he couldn’t speculate on how a potential ownership change might affect plans for the mill’s closure.
“We really can’t comment on the discussions, but it is very much in our minds that there are people there that we want to help out — both the people and the community,” Ewashko said.
He said the Boyle mill and its timber quotas are “strategically very attractive” to Northland, a family-run sawmill 16 kilometres north of Fort McMurray.
“We’re very heavily impacted by oilsands development, so our land base is shrinking,” Ewashko said.
“Our own timber supply is shrinking, so this was a great opportunity for us to remain whole, and grow a bit, also. So that’s the way we’re going into it — it is a great opportunity for us.”
Millar Western announced Nov. 19 it plans to begin a phased shutdown of its Boyle lumber operation this month. Ninety-one employees got severance notices. Log harvesting, which is done in winter, has been suspended, so the shutdown would last at least a year, the company said.
Riopel said the shutdown should be complete by February or March when the current on-site log supply has been exhausted.
When it announced the shutdown, Millar Western cited market conditions and the Boyle mill’s cost structure. Operating costs are higher than at the company’s facilities in Whitecourt and Fox Creek because of a longer hauling distance between the Boyle mill and its timber supply.
Boyle is 160 km north of Edmonton on Highway 63. Timber for the sawmill is harvested from a forest management area north of the community.
Millar Western said that if an agreement is reached with Northland, a deal could be completed before the end of the year. Any transaction would be subject to approval from the Alberta government.