Arauco announces imminent shutdown of particle board operations in St. Stephen

Sari Green/Courier Arauco announced on Wednesday it will be ceasing operations of its particle board division at the plant in St. Stephen by the end of 2019. This decision will impact 60 to 75 employees, who will have three weeks to consider early retirements or depart voluntarily.

St. Stephen – An announcement was made on Wednesday that will make a huge impact on not only the Town of St. Stephen, but for Charlotte County and the whole of New Brunswick. Arauco of North America (formerly Flakeboard) informed employees the production of particle board will cease by the end of this year. The mill will continue to manufacture Fibrex.

At a press conference held at MLA Greg Thompson’s office in St. Stephen on Wednesday, Trevor Holder, Minister of Post-Secondary Education, Training and Labour said the New Brunswick government is taking this “very seriously”. They will have people from his department on the ground to work with the company and its employees, and to see what the next steps will be.

“We need to make sure that we’re not just working with the company, but with the employees, to make sure they have resources available to them for possible transition for work at other places in the region,” said Holder. “The department felt comfortable that we could find many opportunities right now within the region, and we have to remain positive. It still does not change the fact that this is not a good day for New Brunswick. It is not a good day for Charlotte County and the St. Stephen region.”

Holder said this speaks to a larger economic issue that must be taken very seriously in New Brunswick. He said it is time to focus on more private sector investment and competitiveness as opposed to public sector investment that has been the norm over the past several years.

At this point, Holder said they have been told approximately 65 to 75 employees will be affected by the announcement. He said the government has to ensure they are working with these employees to help them transition into new jobs over the next few months. He said this is not to be taken lightly. It’s significant to the whole province, and it sends a signal we have to get more competitive.

“The chickens are coming home to roost here,” said Holder. “When I read the letter they sent to the government, competitiveness was the issue. The first thing they mentioned in their letter was the high cost of natural gas, and energy costs in general. This is another signal to a minority legislature that we have to get our heads out of the sand when it comes to safe, responsible natural gas development in this province. It’s about our own energy security.”

Holder said Arauco is a company that has a “great track record” for doing great things in Charlotte County, and in New Brunswick. Unfortunately, they can no longer be competitive. He said when taxes and energy costs are too high, it is just not acceptable. He added that the environment must be competitive.

“We have seen one government after another, in this province, bringing in higher taxes, whether it’s the carbon tax and not standing up to Ottawa on that, or whether it’s making sure that we’re not developing our resource sector in a safe and affordable manner and having affordable access to natural gas. We have a resource sitting right under our feet, and we’re not going after it,” said Holder.

Fundy the Isles Saint John West MLA Andrea Anderson-Mason, also in attendance at the press conference, said this is a company that helped to keep her family here in Charlotte County, and that this announcement hit on a very personal level for her.

“It is the company that actually kept my family here in the province. I had an arts degree and my husband had an education degree, and we couldn’t find good jobs in the area. In 1998 my husband started working at this very place. It’s what paid for me to go through law school. It’s these jobs that are so important to keeping New Brunswickers in the province,” said Anderson-Mason.

Plant Manager David Moffatt said it was a hard decision to make, and a number of factors have led to the imminent closure of this part of the plant. This is a very competitive market, and Moffatt said the operational platforms are not as competitive as some of the more modern sites. One of the contributing factors to the closure is input costs, including wood, energy costs, and the distance from a lot of the markets the company serves.

Moffatt said the company is going to do whatever it can to help the employees who will be impacted by the shutdown of the particle board department. He said they have several options in mind, including offering severance packages to both departments in the hope that some employees may be open to early retirement, or taking a severance package. The company is forecasting guaranteed wages until the end of 2019, regardless of whether the plant shuts down the particle board operation prior to the end of the year.

“We’ve opened up our severance packages to both departments with the hope of making it as lucrative and attractive as possible,” said Moffatt. “It’s a chance for some of the people who are impacted to get into another department. It’s a hard process, and we’re trying to make it as positive as we can.

“It’s been a hard day, and it’s going to be a hard next few weeks. We want to spend as much time with the folks impacted over the next couple of days. That’s where we’re at right now.”

NB Southwest MP Karen Ludwig said she was saddened to learn from Arauco that they are closing their particle board operations. She said several factors contributed to this decision, including not enough volume, the distance from the market, and an “overall lack of demand due to increased competition from newer and larger facilities”.

“Any time there are job losses in small areas, we all feel it, but no more so than the workers and their families,” said Ludwig. “I was saddened to get that news from David Moffatt. I know this decision did not come lightly. I will do everything in my power to help the company, but the employees are first and foremost in the transition.”

St. Stephen Mayor Allan MacEachern was also saddened by the news. He said he had heard the rumours that it would be happening, but he had hoped that it wouldn’t come to this. He said the news was expected, but shocking at the same time.

“It’s very shocking,” said MacEachern. “We heard rumours that this day would come, but you just keep ignoring it and hope it goes away. Now, they make an announcement, and it’s real, and it’s shocking.”

MacEachern said this announcement will have a huge impact on the town, as well as the entire county and the province. He said not only will this affect the employees, but it will also trickle down to many others.

“We’re talking 60 to 75 employees that are living in Charlotte County. You have the trucking industry bringing materials in and out. You have truckers, wood suppliers, and it’s going to be a big impact to the province as a whole. You have to have the groundwork out there to sustain this industry,” said MacEachern.

MacEachern said there are several factors that have led to this decision, including the high cost of energy and wood fiber, as well as the carbon tax. He said New Brunswick needs to start using its own energy. He said Arauco is working closely with the community, and that they are focusing on fiber board.

“I have a personal attachment to all of this,” said MacEachern. “I worked there for 12 years. I have good friends who work there. It’s bothering me emotionally, and I really worry about it. I do know that myself, and the community, will do whatever we can. I’ve already met with the province, and they are going to work with us on working with employees who are going to need assistance being transferred to other places of employment.

“We’re working on new industry, and they are going to need these workers. Other places are already interested in these employees.”