Millar Western is shutting down operations at its Boyle facility.
“Given current market conditions — lumber markets are quite weak and with Boyle’s high-cost structure — it has become uneconomical to continue to operate this facility at this time,” explained Millar Western director of communications Janet Millar.
She called the decision an indefinite shutdown, which could become permanent if markets don’t rebound in 2017. She said the mill has been losing money for some time and they had looked at every opportunity to keep it operational.
The cost to haul logs long distances to and from the mill, in addition to the loss of Asian markets to cheaper Russian lumber, were a few of the factors that affected the mill’s demise.
Millar Western employees and Boyle Village council were notified of the shutdown last Wednesday.
All 91 employees will receive six months of health and wellness benefits and severance pay based on their years of employment with the company — more details were not provided.
However, the shutdown will be phased until all products are used up — the sawmill will operate using existing log inventory until late December 2015; the planer mill will process existing lumber until late January 2016; and sales and other operations will wind down in late February 2016.
The mill will have 24-hour security to monitor the facility and won’t be listed for sale at this point.
But, the closure is a significant blow to the Village of Boyle and its population of over 900 people.
The lumber facility is the largest employer and source of tax revenue for the Village, bringing in $274,000 in taxes and $313,000 in utilities each year.
“It’s not the death of Boyle, but it is a significant restructuring,” said Boyle chief administrative officer Charlie Ashbey. “We’ll have to change how we do business.”
But Village of Boyle mayor Bob Clark was a bit more optimistic, stating the community had gone through this before — although not on this scale — when Marathon Lumber decommissioned its mill operation in the early 1990s.
The mill sat empty for two years until Millar Western bought it in 1993.
“I think we’re a resilient community,” Clark said. “We’ll find a way to survive.”
Athabasca-Redwater-Sturgeon MLA Colin Piquette said the provincial government would like to help, but it’s tied down by the softwood-lumber trade agreement with the United States.
Over the next year, the provincial government will be in the midst of negotiations to renew the agreement.
So, if any lumber is produced at a lower cost or there’s any hint of subsidization, Piquette said it could jeopardize access to U.S. markets for the entire province.
However, he said he would work with Alberta Agriculture and Forestry Minister Oneil Carlier and Minister of Economic Development and Trade Deron Bilous to find a way to reopen the mill.
