Nackawic, New Brunswick

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The town of Nackawic is located 65 km west of the city of Fredericton on the east bank of the Saint John River in New Brunswick, Canada. The town occupies an area of about 9 km² and is surrounded by the parishes of Southampton and Queensbury with the Village of Millville 10 km to the north.

Latitude and Longitude: 46.00°N, 67.24°W.

1 History
2 2004-2005 Mill closure
3 Famous Nackawic Resident(s)
4 Statistics
5 External links

[edit] History

The area was first settled in 1784 by United Empire Loyalists, primarily through land grants to the families of soldiers who had fought with His Majesty's Regiment of Queen's Rangers during the American Revolutionary War.

It was previously known as the town of Otis. The town, as it exists today, was constructed in the late 1960s upon the completion of the Mactaquac Dam and construction of a large pulp mill. It was officially incorporated in 1976.

Nackawic is home to the world's largest axe.

[edit] 2004-2005 Mill closure

The town's principal employer, from 1968 until September 14, 2004, was St. Anne-Nackawic Pulp Company Ltd. The mill closed suddenly on September 14 and declared bankruptcy the following day, putting 406 people out of work. About 350 contract workers in the middle of a maintenance shutdown were also affected. The plant manufactured/es high-quality photo paper.

The mill has not been modernized since its construction as part of provincial government regional economic development initiative, following the building of the Mactaquac Dam. The rapid increase in value of the U.S. exchange rate for the Canadian dollar also led to the St. Anne-Nackawic plant becoming less viable. It was also revealed that St. Anne-Nackawic Pulp Company Ltd. owed $101.2 million to its creditors, including $50.2 million to unsecured creditors.

After it was revealed during bankruptcy proceedings that the employee pension funds were underfunded, employees under the age of 55 were informed that it was unlikely that they would receive any pension benefits. And as of June 2005, retirees and other employees still do not know what pension benefits they will receive. The loss of pension benefits and the apparent unfairness of distribution sparked an outcry for the provincial government to intervene.

At the same time, the provincial government has been undertaking a reorganization of Crown timber lands in New Brunswick in recent years which was rumoured to include a reduction in the timber harvest for the St. Anne-Nackawic mill. Additionally, the rise of digital cameras and decline of the use of film has reduced the demand for St. Anne-Nackawic's photo paper.

George Landegger, chairman and CEO of Parsons and Whittemore of Rye Brook, New York which was the holding company that owned St. Anne-Nackawic Pulp Company Ltd., was responsible for ordering the shutdown. Another subsidiary of Parsons and Whittemore, St. Anne Industries, was a major secured creditor of the St. Anne-Nackawic mill. However Parsons and Whittemore relinquished title to the plant and equipment, allowing the provincial government to seek a buyer for the facility.

Some of the creditors and companies affected by the closure of the mill included the Port of Saint John, Logistec Corporation, Wallenius Wilhelmsen, and Star Shipping.

Some of the laid-off workers offered to work without pay in order to start the plant up and make the mill more attractive to potential buyers. Other workers proposed buying the mill with government assistance and running it themselves. As the provincial government was also a creditor for the plant, it solicited potential pulp and paper industry companies such as J.D. Irving Limited and Tembec to purchase the mothballed mill.

After several months of discouraging interest during the fall of 2004 and winter of 2005, the provincial government entered into negotiations with Quebec-based Tembec in early winter of 2005. A deal was announced, however Tembec subsequently backed out, claiming that it wasn't economically feasible.

However, several weeks later on March 8, 2005, Tembec announced that it would be forming a partnership with Aditya Birla Group of India, which would see the Nackawic mill reopened as a joint venture, with Tembec the lead operator of the facility. The plant was re-tooled to produce fibre for clothing and it reopened, under the AV Nackawic banner, on January 16, 2006.

The Tembec-Aditya Birla Group agreement is very similar to the operation of a pulp mill in Atholville, New Brunswick which had been mothballed between 1988-1994 in circumstances very similar to Nackawic's, causing significant damage to the economy of nearby Campbellton, New Brunswick. After Tembec-Aditya Birla Group purchased the former Fraser mill, the facility was converted to a dissolving pulp production operation and has operated successfully ever since as A.V. Cell Inc.