Temagami News Archive 96 - Ottertooth.com

Grant Forest Products' OSB plant in Englehart.

OCTOBER 22, 2009

Global business eyes Grant Forest Products

Temagami is separated by a thin green line from the black hole swallowing the world's forests. But that may end if Georgia-Pacific moves into the neighbourhood by taking over Grant Forest Products.

Until recently, the forest industry was dominated by local operators like Goulard Lumber and Liskeard Lumber.

In 1998, Domtar, one of Canada's largest forest products companies, bought the Nairn sawmill (west of Sudbury), the Espanola paper mill and the Elk Lake Planing Mill. It further expanded its vast timber allocations by buying up small operators, particularly to the west and southwest in the Sudbury Forest.

Today it is cutting, or will cut, around the wilderness park and off the Red Squirrel Road. It is busy in the area's largest blight, the Klock Road clearcut on the north shore of Lady Evelyn Lake, chewing through trees as it moves closer to Maple Mountain.

The other major player is Grant Forest Products (GFP), the oriented-strand-board (OSB) giant in Englehart. It has been moving into Temagami in search of scarcer poplar forests. In recent years it logged the Muskego Wildlands and around the wilderness park to feed the plant's daily appetite of a hundred truckloads of timber.

Homegrown tycoon Peter Grant Sr. owns it, or at least, did. As of June 25, it is under bankruptcy protection. And that makes it vulnerable to takeover. Now Georgia-Pacific of Atlanta is sniffing around, according to Timmins-James Bay MP Charlie Angus.

Peter Grant of New Liskeard founded the private company in 1980. His family has been logging the region since the 1920s. The Englehart plant was one of the first waferboard makers in the world, utilizing a widespread tree once considered a weed by foresters. It was a risky move with a new technology focussed on the weed, which made it the industry's bottomfeeder. Sales were slow for the little-known but strong, cheap and abundant panelboard until the plywood shortage in the wake of Hurricane Andrew in 1992.

With the housing boom, the company added a second plant in Timmins and a third in Alberta. Along the way it acquired three corporate jets, a private golf course near New Liskeard, a 65-foot custom-built yacht in Florida, lavish offices on Lake Timiskaming with recreational-boat facilities and former premier Mike Harris as a director. The bottomfeeder became a top gun.

Canadian Business magazine listed Peter Grant as one of the top 100 richest Canadians in 2004, then at the peak of his wealth, estimated at $381 million. With an eerie prescience it wrote: "But watch out, Peter: the darling is already starting to slide."

And did it. Court documents shed light on the hair-raising plunge. Since 2004, the price of OSB has dropped in half. GFP's sales peaked at $506 million that year and fell to $184 million last year when it lost a staggering $196 million.

Two sledgehammers -- the bust in the US housing market and the rise in the Canadian dollar -- hit the industry. But there was an additional sledgehammer reserved for GFP: $700 million in debt.

In 2004 the company launched a plan to add not one plant, but two, in South Carolina at the peak of the boom. Today, one is operating, the other is nearly completed. And the loan interest on both is sucking dry the company's already shrunken cash flow.

GFP slashed expenses. It returned the corporate jets to its leasing company, but that one bit back. GE Leasing was owed money, so it went to court in March pressing for bankruptcy.

At one point 66 OSB plants were operating in North America. Today, just 10 are. Two of the survivors are Grant's: Englehart and Allendale, South Carolina. Though it may have three plants shut down, it has a fifth of the survivors. That is a testament to strong management and plant efficiency.

And that's likely what has drawn Georgia-Pacific's interest: world-class assets and managers at a discount. Georgia-Pacific is one of the world's largest forest products companies, owned by Koch Industries of Wichita, Kansas, one of the largest private corporations in the United States. It is the holding company of the billionaire Koch ("Coke") brothers.

What does this mean for the area? The University of Massachusetts' Political Economy Research Institute produces the Toxic 100, a list of the top corporate air polluters in the United States. Georgia-Pacific is ranked 15.

However, Grant Forest Products is no saintly northern citizen. In 2002 it clear-cut out of existence the nastawgan between Aston and Eagle lakes.

Angus is concerned that the future for local jobs, the forest and the environment will be decided in the offices of the court-appointed monitor Ernst & Young.

“As we have allowed our Ontario industries," he said, "Tembec and Grant, to get bigger and bigger it has had less and less positive results for our communities. When you turn it over to international players the threat magnifies."

"There’s lots of issues with Georgia-Pacific's track record on environment issues and labour rights. The more fundamental question is: who is speaking for the public interest in this behind-closed-door decision-making?"

RELATED STORIES: Grant Forest Products mill closes

Jump coming in wildlands logging and new roads

Ontario gives away forests

OCTOBER 18, 2009

Fall colours from space

Post-peak colours from satellite.

sATELLITE IMAGE: October 18

OCTOBER 14, 2009

Endangered wilderness list of 2009

Logging, after decades of opposition, remains the overriding threat to the areas listed on Friends of Temagami's annual Most Endangered Wilderness list.

Sturgeon River and Solace Wildlands, a virgin forest southwest of Florence Lake, is threatened with clear-cutting and a bridge over the Sturgeon River, a provincial park.

Ottawa-Temiskaming Highlands Trail, between Latchford and Grand Campment Bay on Lake Timiskaming, will be logged to within 30 metres of the path, scant enough that wind would threaten to take out the remaining trees.

Friends of Temagami, a local conservation group, seeks the public's help. More information can be found on its website.

Its annual meeting, open to the public, will be held in Temagami at Smoothwater Ecolodge on November 14.

EXTERNAL LINK: Temagami's Most Endangered Wilderness 2009

OCTOBER 8, 2009

Tourist operator banned from bear hunt

Two Temagami tourist operators were convicted of illegal bear-hunting operations, according to the North Bay Nugget.

Lawrence Dorman of Temagami Shores was banned for life from bear hunting and guiding after operating a hunt in the bear-management area of Angus Lake Lodge in August 2008. He had already been warned at least once prior to the charge.

Gary Mercer of Angus Lake Lodge allowed Dorman to take hunters onto his licensed bear-hunting area, which was prohibited under the management-area agreement with MNR. Mercer was convicted for the offense.

Both were convicted September 17 by the Ontario Court of Justice in Temiskaming Shores (formerly the Tri-towns).

EXTERNAL LINK: Nugget story