Government�s commitment to explore the potential for further development of the Labrador sawmill and value-added wood products industry has taken another step forward with the release today of the Strategic Plan to Develop Labrador Secondary Manufacturing and Value-Added Wood Products Industry.

A team of senior managers from across government will now do the next piece of work necessary in regards to investor attraction and marketing to determine the viability of the plan.

"This strategy is a result of exhaustive consultations at every step in the process. It is a significant piece of work that assists in focusing where we need to concentrate our efforts," said the Honourable Kathy Dunderdale, Minister of Natural Resources. "The consultant has identified a potential operation that might work within the constraints of the Labrador industry. However, it has yet to be tested and it still requires securing a proponent or proponents and solid markets. I don�t want to raise any false expectations that this concept will be a reality. We are prepared to do the necessary work to determine if it can work."

The study recommends the establishment of a sawmill and manufacturing plant in Happy Valley-Goose Bay to produce construction lumber and packaged homes both for local and northern markets. The residues would be processed into bioenergy for use by the mill, with excess being fed into the local grid or into wood pellets for local consumption. The concept would provide for 100 per cent local processing of the resource, a principle that was frequently expressed during the consultation process. The estimated cost for the proposed operation is in the range of $12 million-$16 million and would create about 35 jobs. Harvesting operations could also create about 60 jobs.

"When we received this report, we took our time to understand the recommendations outlined in the report and what is the best way to go forward," Minister Dunderdale said. "The concept requires substantial additional work in investor attraction and marketing and we now have a team established of officials to work through these issues. We will work together with the people of Labrador to ensure the industry grows to its full potential, based on what the resource can support."

The team includes officials from the departments of Business, Innovation, Trade and Rural Development, Labrador and Aboriginal Affairs and Natural Resources. The departmental regional manager for Labrador will hold group sessions over the next few weeks with major interest groups who were part of the consultations to discuss the report�s finding and the approach for going forward.

The study was undertaken to determine the potential for further development of the Labrador sawmill industry and value-added wood products at various locations in Labrador for the benefits for Labradorians. A key part of the study was consultations with industry and interest groups. The Terms of Reference for the study were drafted based on those consultations. Interested parties were provided the opportunity to comment on the Terms of Reference to ensure their comments and concerns were reflected accurately.

The report can be found on the government Web site at //www.nr.gov.nl.ca/nr/.

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Media contact:
Tracy Barron
Director of Communications
Department of Natural Resources
709-729-5282, 690-1703
TracyBarron@gov.nl.ca

• The purpose of the study was to determine the potential for further development of the sawmill industry to produce construction lumber and secondary or value-added products at various possible manufacturing locations in central (Happy Valley-Goose Bay area) and south-coastal Labrador.

• The objective was to determine the potential for a manufacturing business by defining the available wood supply and quality, identifying the relationship between the local forest industry and the proposed business, identifying potential markets, developing a business/operational model, and defining the manufacturing complex that could meet the needs of the potential identified market.

• Consultations with industry, as part of the process, identified four strategies that formed the basis of the potential secondary wood products manufacturing operation scenario presented in the strategy. They include an operation that can meet local housing needs and markets in the north, maximizes the value from fibre and ensures total utilization, provides local employment and is close to self-sufficient in regards to energy needs.

• When implemented in a functioning operation by the consultant, these four strategies resulted in the production of "housing kits" designed to be shipped as complete sets of components that can be assembled at a final destination. The consultant outlined a conceptual manufacturing plan consisting of a sawmill, assembly operation, value-added operation producing such things as flooring, wall panelling and shelving and a component to utilize mill residues.

• The study has identified a number of issues that need to be addressed to determine if the proposed operation is viable, including: identification of a proponent with the financial backing required; recruitment of senior management team to bring business to the operation; site selection; determination of energy needs; securing harvesting arrangements for access to timber; sourcing expertise in the building materials supply chain and in staging and assembly functions, and establishing business relationships with the identified markets.