News Release - May 14, 1999
CIC SELLS SASKFOR MACMILLAN INVESTMENT; CONSTRUCTION OF HUDSON BAY OSB MILL TO BEGIN IMMEDIATELY
Deputy Premier and Crown Investments Corporation Minister
Dwain Lingenfelter and Craig Neeser, Senior Vice-President of
MacMillan Bloedel Ltd., announced today that MacMillan Bloedel will
purchase Saskatchewan's 50 per cent interest in Saskfor MacMillan for
$80 million and that it will immediately begin construction of a $180
million oriented strand board (OSB) mill in Hudson Bay.
"These two announcements are very good news for Saskatchewan's economy
and for the future of our forest industry," Lingenfelter said. "The
sale of our investment will bring a significant financial gain to the
province, while MacMillan Bloedel's commitment to build a new OSB mill
will increase economic activity and create hundreds of jobs for people
in the Hudson Bay area."
The OSB project will create 150 jobs at the mill, 300 woodland jobs
and 300 jobs during peak construction. In addition, it is anticipated
that hundreds of indirect jobs will be created as a result of this new
development. The mill will be located four kilometres south of Hudson
Bay. It will have the capacity to produce 570 million square feet of
3/8 inch OSB annually. The consistency and quality of OSB is making
it a popular replacement for plywood in North America.
MacMillan Bloedel will continue to operate the three mills that
had been owned by Saskfor MacMillan a plywood mill and an OSB
mill in Hudson Bay and a sawmill at Carrot River. They employ
about 400 people and provide another 250 woodland jobs.
"Our partnership with MacMillan Bloedel over the past four years
has been very rewarding," Lingenfelter said. "Our three mills
have provided hundreds of jobs for local people and numerous
spinoffs for local businesses. The partnership has also been
profitable, returning $8.2 million in dividends to the province.
The sale of our interest will result in a gain of about
$30 million and the repayment in full of an $11.7 million loan."
Saskfor MacMillan was formed in 1995 as an equal partnership
between the Province of Saskatchewan and MacMillan Bloedel Ltd.
Each party contributed $50 million in equity, with Saskatchewan's
contribution coming from the assets of the former Saskatchewan
Forest Products Corporation.
"We have had an excellent relationship with the Province and the
people of Saskatchewan and we hope to continue it through our
commitment to the existing mills and the new OSB mill," Neeser
said. "We are particularly excited about the prospects for our
new state-of-the-art mill. The fibre resource in the area is
among the best on the continent and there's a huge untapped
market for the quality products we will produce. We believe we
will have a long and rewarding future with the people of Hudson
Bay and area."
The new mill and associated forest operations as outlined in the
company's 20-year forest management plan were both subject to the
province's Environmental Impact Assessment process.
As well, an integrated land use plan with full public and
stakeholder involvement was completed by government last summer.
"This new OSB mill is an exciting example of how we will be doing
more manufacturing in Saskatchewan by applying technology and
innovation to create marketable products," Economic and
Co-operative Development Minister Janice MacKinnon said. "We are
making better and smarter use of our forestry resource to create
jobs and opportunities while still preserving our precious
The OSB project is part of $850 million of private sector
investment in the forest industry in Saskatchewan that will
result in the creation of as many as 10,000 direct and indirect
jobs over the next three years. Additional jobs are expected in
manufacturing, agro-forestry and research and development.
"We are pleased and proud that MacMillan Bloedel's new OSB mill
will be part of the major expansion that is occurring in our
forest industry," Lingenfelter said. "The benefits will be
enormous, not only to the people and businesses of northern
Saskatchewan, but to the economy of the entire province."
Construction of the new OSB mill will take about 14 months.
Commercial production is expected to begin in August, 2000.
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For more information, contact:
Crown Investments Corporation
Phone: (306) 787-5889
MacMillan Bloedel Ltd.
Phone: (604) 661-8651