Fibra TECH filing for creditor protection.

• Author: Smith, Jessica
• Position: SPECIAL REPORT: FORESTRY

Despite a flurry of pre-election announcements that paved the way for a new value-added operation in Atikokan, pieces of the plan began unraveling when the local particle-board mill filed for creditor protection October 10.

While it seemed that events couldn't get much worse for Fibra TECH, 140 workers shut down the plant and walked off the job after hearing that they wouldn't be paid for their last three weeks of work. But owner Dan Warren says there is still hope.

"We're hoping to put together a reorganization package to get us going again. Our customers are working with us and are being patient."

How did it all go so wrong within two months of two provincial funding announcements that made it possible open a laminated veneer (LVL) plant and co-generating station, with cost-saving synergies for Fibra TECH?

"We have been struggling with the same things all the other forest industries are struggling with: the dollar, high energy costs, (and a sluggish United States housing market)," said Warren, also president of Superior Laminated Lumber Corp.'s proposed LVL mill. "We've tried everything we can to mitigate it. We put in a new burner, we cut our gas costs by 95 per cent, and we cut our power costs by 37 per cent."

Even $6 million in provincial supporthas failed to offset the company's difficulty with the strong Canadian dollar.

On top of that, Fibra TECH and Thunder Bay-based Delta Energy Co. were unable to reach an agreement on the terms of a power arrangement for a 10-megawatt co-generation station.

Days before shutting down, FibraTECH attempted to secure loans from credit unions through FedNor assistance, then accrue $1 million in additional loans from two other credit unions to keep operating...