The president and CEO of Eacom Timber Corp. said his company will withhold making any major investments in its recently-acquired Northern Ontario sawmills until there is a change in Ontario's forest policy.
In an interview with Northern Ontario Business, Rick Doman sharply criticized the provincial government for snuffing out Eacom's expansion plans in the northwest and making it tougher to harvest wood in the northeast.
Doman said he's hopeful that a change in policy after the Oct. 6 election will lead to a more “pro-business” government that is committed to the forestry industry.
“We came into Ontario with a lot of capital, and more to spend, and were not going to spend it until we see a change,” said the British Columbia-raised lumberman.
Last year, Eacom acquired four Ontario sawmills in Timmins, Nairn Centre, Gogama and Ear Falls along with two Quebec mills from Domtar for $127 million.
All, but the Ear Falls mill, are operating. The company also has a 50 per cent stake in an engineered wood manufacturing plant in Sault Ste. Marie that it picked up from Domtar.
The British Columbia-raised forestry executive said global lumber demand is poised to rebound in 2013, and Ontario can be a big part of it.
But Doman said the province is making it tough for companies like his to harvest the annual allowable cut of 26 million cubic metres with forest management policies geared toward conservation. He's particularly concerned about caribou protection measures proposed for the Abitibi River Forest that will take a quarter of the available timber there out of circulation.
“I feel there's huge potential in the Northern Ontario, that's why we're here and want to expand here. The only thing holding us back is the current government.”
The company wants to gain access to an additional 300,000 cubic metres of fibre from the Romeo Malette Forest, near Timmins, but has yet hear back from the province on the status of their application through the Crown wood supply competition.
Doman said the company is exporting lumber to customers in the U.S., United Kingdom, Northern Europe and the Middle East, but they need more wood to sustain their Northern Ontario operations for the long-term.
Doman said his fledgling Montreal-based company is prepared to spend $40 million in new equipment to cut costs, run more consistently, and add more shifts. The company employs 1,400 millworkers and woodland contractors in Ontario.
Eacom also planned to acquire two bankrupt sawmills in Thunder Bay and Atikokan, but those deals fell apart when ministry officials told the company there was no Crown wood available.
The machinery from the former Buchanan Group mills was being sold off at auction in late September.
Doman said those mills would be operating today if his company hadn't been “chased off.”
