Government Invests $10 million to
Strengthen Forest Industry and Create Jobs on Northern Peninsula

The Provincial Government is backing a multi-million dollar proposal that will modernize a saw mill and establish a wood inventory yard and pelletizing facility on the Northern Peninsula, an area that is under tremendous pressure as a result of the downturn in the forest industry.

The $10-million investment in Holson Forest Products of Roddickton will sustain approximately 300 direct and indirect jobs in the region and create a new industry in manufacturing wood pellets. Under the Forest Industry Diversification Fund of the Department of Natural Resources, the company will receive a $7 million non-interest term bearing loan to be repaid over a 15-year period, as well as a $2 million grant. The Department of Environment and Conservation will also invest $1 million under its Green Fund toward the establishment of the wood pelletizing facility.

�This region of the province has been particularly hard hit in recent years as a result of the closure of two pulp and paper mills and the idling of a paper machine at the mill in Corner Brook,� said the Honourable Kathy Dunderdale, Minister of Natural Resources and Minister Responsible for the Forestry and Agrifoods Agency. �We have been working with industry to identify new markets to sustain the forest industry in this region and we believe Holson�s multi-phase proposal will carve a new future for the forest sector on the Northern Peninsula.�

Holson will establish a regional wood inventory yard, which will allow harvesting to begin on the Northern Peninsula this season. The inventory of fibre will serve as feedstock for the proposed wood pelletizing facility when it starts production in the spring of 2010. The wood inventory yard will maintain direct employment in the industry for about 130 people. Sawmill modernization and the establishment of a pellet plant will create an additional 22 jobs.

�We are pleased to be providing funds from the Newfoundland and Labrador Green Fund to help with the establishment of the wood pelletizing facility on the Northern Peninsula,� said the Honourable Charlene Johnson, Minister of Environment and Conservation. �Wood pellets offer an attractive economic and environmental alternative to space heating with fossil fuels. I applaud Holson Forest Products for creating such an initiative that is geared toward environmental sustainability and real reductions in greenhouse gas emissions.�

�Many communities on the Northern Peninsula depend on the forest sector,� said the Honourable Trevor Taylor, MHA for The Straits-White Bay North. �This long-term plan is essential for their economic future and it is an indication of government�s commitment to helping the forest industry remain competitive, viable and able to diversify. We need to sustain and create employment in rural Newfoundland and Labrador and that is what we are doing.�

�I am ecstatic we have our forest industry back!� said Ted Lewis, president of Holson Forest Products. �This is a great day for the industry on the Northern Peninsula and in particular for Holson Forest Products. We see this as an opportunity to develop a long-term, independent business from a sustainable resource. Government�s commitment to this sector breathes new life into this area and is giving us an opportunity to diversify our industry for a new and exciting future.�

The Forest Industry Diversification Fund was established in Budget 2008 to help the provincial sawmill sector modernize and diversify, and to provide sawmill operators with capital to acquire new infrastructure, technology and equipment to support innovation and modernization of the industry.

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2009 08 21                            5:10 p.m.