NL pays out again for Holson Forest Products

May 29, 2015

By: The Telegram

Department says negotiations with RenTech still include Roddickton-based company

The provincial government paid about $185,000 last year to help the struggling Holson Forest Products in Roddickton.

In 2014-15, it offered up $65,000 for insurance costs on equipment at the company’s processing plant and another $120,000 for an engineering study and new business plan.

It comes atop about $10 million in past public spending on a long-criticized and, so far, failed attempt at kick-starting wood pellet production on the island’s northern peninsula.

The newest spending prompted Liberal MHA Chris Mitchelmore to question, in a House of Assembly committee meeting earlier this month, why the private company has received more money from the government.

Vaughn Granter, minister responsible for Forestry and Agrifoods, defended the spending as the government protecting past investments.

“It was imperative the government would provide the insurance cost this particular year, just in case a travesty or disaster would take place,” he said, repeating the reasoning in the House on Thursday when asked again about the funding.

The questions this time were from Liberal Leader Dwight Ball, who noted the government also provided insurance assistance in the previous year: $84,000.

Ball went a step further, asking how many jobs have been created by the spending on the Roddickton plant.

Premier Paul Davis replied, but gave no figures.

“We are tested every single day on our policies. We are creating an economy. We are creating growth and development in businesses. We are creating jobs and opportunity in rural and small parts of the province,” he said. “We make no apologies for it.”

The business plan and engineering study for Holson Forest Products were completed with the assistance of TS Manufacturing, according to the forestry department.

And Granter says the business plan is being “shopped around.”

At the same time, it has been over a year since negotiations were revealed between the province and U.S. wood product producer RenTech, regarding former Abitibi-Bowater timber assets and the potential for new in-province wood processing, with the Roddickton plant a factor.

“Rentech, Inc. has expressed interest in the forest resources in central Newfoundland and on the northern peninsula and is proposing to develop a wood pellet plant in Botwood and potentially invest in the Holson Forest Products pellet plant in Roddickton,” a spokesman for the department stated when asked for an update Thursday.

“Discussions with the company remain ongoing.”

Meanwhile, NDP House Leader Lorraine Michael has asked if any trees cleared for the Labrador-Island Link (LIL) power line were to be used at the Holson Forest Products site, as part of the ongoing, Nalcor Energy-led Muskrat Falls development.

Granter said supply for the site has not been a problem, suggesting no tie-in with the construction project.

Calls made to the Holson Forest Products office Thursday afternoon were not returned as of press time.

 

By: The Telegram

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