As more and more traditional pulp production facilities shut their doors across Canada, one industry insider says the keys to the sector’s survival are “innovation and investment.”
In an interview with The Sault Star, Glenn Clifford, who was worked in the Canadian pulp and paper industry for nearly thirty years, cited competitive labour rates on the global stage, concessions, a stronger Canadian dollar, rising hydro rates, shrinking profit margins, the digital age and the reluctance of Canadian companies to invest in technology as factors contributing to the collapse of the traditional pulp and paper industry.
The way out of the apparent slump is for companies to look ways to manufacture alternative and innovative products, saying the mills that are surviving in the changing Canadian climate are the ones that are changing.
Speaking about companies such as Domtar Corp., which has recently purchased two large manufacturing facilities that produce fluff pulp for products like diapers, Clifford said the ability to adapt is what will lead struggling pulp and paper producers out of the woods, so to speak.
“Are there ways of retooling mills and rethinking what we can do with those mills? Absolutely,” he said. “They’ve taken the initiative and invested in new ways of manufacturing product for different industries, and that’s important.”
In some cases these efforts to change the direction of the pulp and paper industry are being subsidized by governments.
In Atlantic Canada, for example, an initiative partnering the Maritime Lumber Bureau, the Atlantic Canada Opportunities Agency (ACOA), and the provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador will form a program called Atlantic WoodWords with the goal of diversifying the sector.
“We continue to invest in industry and initiatives that will make Canadian forest products even more attractive in the global market place,” ACOA Minister Bernard Valcourt in January. “With this investment, we are helping the forestry industry in Atlantic Canada to meet its market challenges and pursue strategic opportunities for growth through training, education and innovation.”