The saws at Sexton Lumber in Bloomfield remain idle this week after the company shut down due to a shortage of logs it blames on the government.
Then Natural Resources minister Tom Marshall said the government offered the company more raw material and Sexton Lumber turned it down.
On Sept. 30 Sexton Lumber stopped producing and temporarily laid off 79 of its 100 employees, citing an inadequate supply of logs.
Kevin Sexton, the company’s owner, says his operation consumes 180,000 cubic metres of forest a year, and needed another 40,000 cubic metres to stay in operation.
The company’s supply of trees is dwindling, according to Sexton, and 20 feet away from its allocated area in central Newfoundland there’s untouched forest that could provide the raw material the company needs.
There is a 280,000-cubic-metre timber reserve available, previously held by Abitibi-Bowater before it left the province in 2009. Sexton said his company sent a proposal to harvest part of that forest but it was rejected by the Department of Natural Resources.
The province accepted 14 expressions of interest (EOIs) from prospective harvesters of the timber reserve, and has narrowed them down to two, according to Marshall, one from an American company, the second from a group of companies, some international, some local.
Marshall said the province will accept the proposal that creates the most jobs and economic boost for the province.
“It’s a public resource, and we want to make sure as many people as possible can benefit from it and we maximize the benefit of what’s there,” he said.
In the meantime, the government offered Sexton Lumber the rights to timber reserves near Gambo, and Kruger in Corner Brook offered additional sawlogs from the west coast. The Department of Natural Resources also offered Sexton Lumber the option of using part of next year’s timber allocation this year.
Sexton said the road to the timber reserve near Gambo is impassible, that trucking enough logs from the west coast to resume operation would cost him $571,000, and that cutting next year’s reserves this year would create a shortfall in 2014.
He wants access to the 280,000 cubic metres of timber available, saying the government shouldn’t deny a local business in favour of an out-of-province operation.
“Don’t kill existing industry in the process. And that’s what they’re doing,” he told the Packet. “They’ve shut us down because we don’t have enough wood supply. We’re
20 feet away from it, our harvesting machines, but they won’t allocate any more or allow us to harvest any more wood.”
In a news release issued shortly after Sexton Lumber announced the shutdown, the Department of Natural Resources pointed out that it had already provided Sexton Lumber with a $2.75-million equity investment, and assistance in forest planning, road construction and staff resources.
The government has a policy that logs large enough for lumber must go to sawmills, according to Marshall, and even if a company comes in that wants to harvest wood for pellets, it must provide logs to mills such as Sexton Lumber.
Those logs may be sold for a profit, however.
The two companies the government is considering in its EOI process have until the end of the month to submit detailed business proposals. Government has no obligation to accept either proposal, according to Marshall, and could issue another expression of interest next year if it chooses.
In the meantime, Sexton Lumber’s customers are dealing with shortages. The company supplies dairy farms with bedding, and palette manufacturers with timber. It’s also a major supplier of fibre to the pulp and paper mill in Corner Brook.
Marshall said Sexton Lumber could have avoided the shutdown.
“I have a concern when someone has a public resource. We’d expect there’d be proper planning and management so you wouldn’t have these shutdowns,” he said.