The Neucel pulp mill in Port Alice has been sent to receivership. (Tyson Whitney)

Bankruptcy underway for Port Alice pulp mill buried in $272 million debt

Mayor sees bright future despite Neucel leaving the village on the hook for $1.8 million

The dormant pulp mill in Port Alice is officially in bankruptcy proceedings over unpaid taxes and other outstanding debts.

The mill is owned by Neucel Specialty Cellulose, which in turn is owned by Fulida Holdings, a large private Chinese textiles company. Neucel owes a total of $272 million to various creditors—including the largest portion of $235 million to Fulida Holdings. Of the remaining $37 million, Neucel owes $1.8 million to Port Alice—which could be closer to $2.2 million when this year’s taxes are billed—$21 million to Unifor Local 514, $13 million to the province, $50,377 in unpaid wages and $388,277 in unpaid BC Hydro bills.

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Price Waterhouse Cooper is the appointed receiver, as determined by B.C.’s supreme court on April 14. PWC issued request for proposals on May 5 for fencing and security at the mill, in order to secure the premises while bankruptcy proceedings are underway.

Unpaid tax bills to Port Alice have had a significant impact on the village. Neucel had made up 70 per cent of the town’s tax base. Property taxes could be seriously affected when the mill property is reassessed next year. The village has also had to make the difficult decision to keep the Doug Bondue Arena closed for two seasons now because of lost tax revenue.

Ultimately, receiving payment for taxes owed is the goal, but it’s early in the receivership process, so it’s impossible to say if that’s a likelihood, Port Alice Mayor Kevin Cameron said. And long term, the goal is to have a new tenant in the pulp mill’s location.

“It probably won’t go back to the pulp mill days of 400-plus employees, but if we can get something with 25 jobs, that matters to Port Alice. Even two jobs matter right now,” noted Cameron.

The mill was a major employer in the town with more than 400 employees, and the workers have had to deal not only with unpaid wages and severance, but a lack of available work since the mill went into curtailment near the end of 2015. Many residents have since left the village.

“It [Neucel] was the economic driver for Port Alice,” Cameron stated. “And then boom, they shut down and people were hanging around waiting to go back to work for about two years. Eventually they realized they’d have to go somewhere else.”

The mill has essentially been shuttered for five years since Neucel laid off hundreds of workers, supposedly for a renovation which never began. Last year in February, the handful of remaining employees were abruptly told to leave in the middle of the day by a member of Fulida who randomly showed up in the village.

The shuttered mill left a dangerous chemical mess behind which the province has had to hire contractors to deal with.

Last year Arterran Renewables explored the idea of leasing the mill from Neucel, but never took possession. Due to the existing debts and environmental hazards, Arterran backed out. Arterran’s Director of Business Development, David Tiessen said the company is still interested in the site, but are currently looking at a site in Campbell River.

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“Port Alice is no stranger to hardship,” added Cameron. “We lost our major tax base, then we lost our bank—they had to close because nothing was happening. Then we had the eight-month forestry strike and now we’ve got a virus pandemic.

“And yet, there’s no place I’d rather live than Port Alice. It’s just a great community.”

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@ZoeDucklow
zoe.ducklow@blackpress.ca

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