Interview with Pierre Fitzgibbon | Quebec ready to save other factories… but not all

After those of Thurso, Amos and Baie-Comeau, two other paper mills risk closing within five years. Among the ten vulnerable mills, three or four will have to be modernized with the help of the State since the sustainability of the province’s forestry and sawmilling activities depends on it.

Andre Dubuc
The Press

Julien Arsenault
The Press

“I have identified 10 factories that are in segments where the industry is in decline,” said Quebec Minister of Economy and Innovation, Pierre Fitzgibbon. That doesn’t mean they’re all going to close. But things are going to have to happen, like cost reductions. My intuition is that there will be less than three that will close. »

Quebec had announced a $1 billion response plan for pulp and paper in March 2021. The Press sat down with Mr. Fitzgibbon to take stock almost a year later.

The printing paper industry is struggling with a structural decline in demand.

Since October 2018, the government has disbursed half a billion dollars in loans and equity investments for the conversion and improvement of paper mills, notably at Kruger. The total investment amounts to 2.4 billion. This corresponds to leverage of $4 of private investment for every dollar advanced by the government.

The environment would be conducive to private investment. “The industry makes money from softwood lumber. Integrated companies that have sawmills are making a lot of money and are ready to reinvest,” says Fitzgibbon.

Among the modernization projects already carried out, Kruger has closed its newsprint machine in Bromptonville, in the Eastern Townships, to manufacture tissue paper. At its plant in Trois-Rivières, 250 million have been invested to produce 100% recycled cardboard. In both cases, Investissement Québec participated in the financial arrangement.

“Our philosophy is not to close our newsprint mills, but to convert them to growth sectors,” said Jean Mageau, spokesperson for Kruger. For example, for the Wayagamack plant in Trois-Rivières, which produces magazine paper, the conversion to specialized products, such as labeling, has been underway for two years.

The decline of thermomechanical pulp

Vulnerable mills make thermomechanical pulp papers from wood chips. These products, such as newsprint, advertising inserts and magazine paper, are in decline, underlines Michel Vincent, economist of the Council of the forest industry of Quebec (CIFQ), which also defends the interests of the paper mills.

“At the start of the 2000s, there were 63 factories and several had more than one machine. Looking at the statistical portrait […], we landed,” says Luc Bouthillier, professor at the Faculty of Forestry, Geography and Geomatics at Université Laval.

In Quebec, White Birch (Quebec, Masson-Angers, Rivière-du-Loup), Résolu (Clermont and Gatineau) and Kruger (Trois-Rivières) operate newsprint mills. Resolute closed its Amos and Baie-Comeau plants permanently in April 2021.

The minister did not want to identify the factories threatened.

Paper mills as leverage

The sawing activity generates shavings which, themselves, are used to make paper. The valuation of chips is essential to the profitability of sawing activities on the basis of the historical price of a thousand board feet, argues Jean-François Samray, CEO of the CIFQ.

Because of the closures of Thurso, Amos and Baie-Comeau, the magnitude of the woodchip surplus is forcing Quebec to export them at a loss, deplores Mr. Samray. The volumes exported correspond to the annual consumption of a good-sized paper mill, according to the CIFQ.

To correct the situation, Quebec is ready to intervene, said Minister Fitzgibbon, referring to the importance of the forest industry for regional economic activity.

“The government is working hard to find a solution for Thurso, because it is at the heart of the mixed forest of the Outaouais, he illustrates. Without an alternative solution, people in forestry operations will encounter difficulties. We subsidize the transportation of chips at $20 a ton outside the Outaouais to maintain activities in the forest and in the sawmills. It’s not sustainable in the long term. »

An industry to reinvent

“Today, a new industry has to be invented because there is a whole market opening up for wood products,” says Professor Bouthillier. There are tissue paper, packaging, sanitary and personal protection paper products and biorefineries. Containerboards are also going very well with the popularity of e-commerce.

Most of the growing products have the particularity of being made from recycled fibres, residues and kraft pulp. The difference between the latter and thermomechanical pulp is that kraft pulp separates the three elements of wood (cellulose, lignin and hemicelluloses), which makes it possible to produce higher quality products, explains Mr. Vincent.

In Quebec, the Saint-Félicien (Résolu) and Lebel-sur-Quévillon (Chantiers Chibougamau) mills produce softwood kraft pulp. There is also a hardwood kraft pulp mill in Windsor, owned by Domtar.

“I would be open to financing a third softwood kraft pulp mill,” said Minister Fitzgibbon, before adding that the origin of the wood would be an issue.

Converting a plant manufacturing thermomechanical pulp into a kraft pulp production unit represents a colossal investment of around 1.5 billion, according to the CIFQ.

Biorefineries to dispose of chips

There is pulp and paper, but to support the forest industry, the Minister of Economy and Innovation, Pierre Fitzgibbon, is relying heavily on biorefineries fueled by forest residues.

“I think we are going to see projects, and I have one in mind, he said, in an interview with The Press. I can’t name it because I’m in negotiation. It is a project to make biofuel which will use the residues lying around on the ground in the forests and make biofuel which will replace, for example, coal. »

The organization Bioénergie La Tuque has already obtained financial assistance of 6 million from the Legault government to “demonstrate the potential” of the complex. Estimated at at least 1 billion, this project could include the Finnish oil company Neste, partner for the studies.

Announced several times since 2008, the Recyclage Carbone Varennes project aims to produce biofuels and “renewable chemicals” using forest residues. In Lac-Mégantic, Resolve Energy is building a demonstration plant.

Mr. Fitzgibbon believes that this niche, combined with tissue paper and recyclable packaging, would ensure the sustainability of the forestry sector.

Luc Bouthillier, from the Department of Wood and Forest Sciences at Laval University, sees the same thing.

“The joker in the deck of cards is the whole idea of ​​biorefineries,” said the expert, in a telephone interview with The Press. Forest residues can be used to manufacture less polluting fuel and specialized lubricants where the margins are attractive. »

Mr. Bouthillier also mentions the production of wood pellets at the Barrette-Chapais sawmill in Saguenay, another project that has obtained financial support from the provincial government.

“They got into this sector for the English market because there, there is a very clear policy to move away from fossil fuels to produce electricity. It will be understood that it is a niche market, but it remains an important signal. »