New mill to build for IKEA: Ramsay, FedNor confirm IKEA will buy from new value-added plant.

• Author: Ross, Ian
• Position: FORESTRY - IKEA Canada

Hearst- A new value-added mill in the Hearst area will begin producing furniture components for a major international furniture maker starting this fall.

Industries LacWood Inc., a startup company, will move into a new facility to be used to manufacture bed frames and shelving components for IKEA.

FedNor and the Northern Ontario Heritage Fund Corporation have contributed a combined $1.5 million in repayable loans towards the construction of a 15,000-square-foot building in nearby Hallebourg, about eight kilometres east of Hearst on Highway 11.

Minister of Natural Resources David Ramsay confirmed the connection in an interview with Northern Ontario Business. (See his comments in a related story on page 22.)

The plant will use softwood feed stock from lower grade wood and shorter lengths of spruce lumber from area saw mills located within a 250-km radius of Hearst.

With a September start-up planned, president Normand Lacroix says the company will produce about three-million-board-feet by year's end, with production expected to ramp to 10 million-board-feet in 2006.

He was reluctant to disclose the project's total cost, which includes financial support from Caisse populaire, the Nord-Aski Regional Economic Development Corp. and some private investors.

In late June, the company was operating out of temporary facilities in Hearst with only six employees, but was expected to increase to 15 by September, with the potential to double the workforce if the demand increases.

A low-energy drying facility is also planned.

Together with business partner Jocelyn Blais, Lacroix had been eyeing possible value-added opportunities for years.

"All the wood from our area is shipped out of town to be transformed one way or the other."

In the planning stages for more than a year, the project emerged out of contacts made by development officials at Nord-Aski with IKEA and through discussions with major lumber manufacturers in the area.

Nord-Aski manager Adrien Veilleux expects to be making announcements about other similar ventures soon.

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