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A century on the Coast - part five

Sometimes the more things change, the more they stay the same. Such is the case with Howe Sound Pulp and Paper's (HSPP) mill. Over its 100 years of being, the mill has always been subject to many different fluctuations.

Sometimes the more things change, the more they stay the same. Such is the case with Howe Sound Pulp and Paper's (HSPP) mill. Over its 100 years of being, the mill has always been subject to many different fluctuations.

Of these, the two that affect the mill the most are the same basic economic drivers that determine the stability of any company, however large or small - supply and demand.

Over the years, to maintain its market share, the mill has seen significant changes, including major upgrades to both the plant and the way of doing business.

When HSPP first hung out its shingle at the turn of the last century, mills were still making paper from rags and whatever wood they could scavenge. However, right from the start, HSPP did things differently. The forests in the area provided a plentiful source of wood fibre and of sufficient quality to produce a decent grade of wrapping paper.

Unfortunately the other side of the equation didn't materialize. The demand for paper in Vancouver was lower than expected and the cost to ship to other markets prohibitive. Those factors made for a short-lived start to the mill.

Over the early years of the 20th century, the mill waxed and waned under the burden of many factors: the First World War, the Great Depression and the Second World War all played a part in the early days of the mill.

In the '40s the mill underwent a massive improvement. Several million dollars were pumped into the mill. The end of the decade saw the return of men from the war. The returning soldiers embraced the mill as a great place to work, and some of their heirs still work there today.

The new and improved operation began to carve a niche for itself in the market. In 1945, modern changes came to the mill that increased production to 100 tons per day, up from 60 tons at the start of the decade.

The downside of the increase of production was the corresponding increase in pollution. That is a side of the mill we'll explore more fully in a further segment.

The next biggest change to the operations came in 1988. Over a four and a half year span, a new operation came into being. The workforce stayed the same, but production tripled.

Al Strang, manager environment and external relations, said the old mill (in 1988) was inefficient and at the end of its life.

But now as before in the mill's history, outside forces are combining to cause worrisome times at the Coast's largest non-government employer.

The biggest challenge the mill is facing currently is the same as all businesses in today's economy.

"We have to generate enough revenue to cover all our expenses and have enough left over to give our owners some profit," Strang explained.

He highlights three hurdles the mill has to leap to make that happen. First, Strang said, is the rising dollar. The mill's products are sold in American dollars, and when Canadian currency gains strength, the price goes up for purchasers. Because the expenses are paid in Canadian dollars, there is no offset savings to the company.

The second concern is one shared universally - the downturn in the global economy. "This has resulted in reduced demand for our product," Strang said.

One of the chief concerns is the reduction in demand for newsprint worldwide. Less advertising demand because of a depressed economy translates into a reduced demand for newsprint, and coupled with a downturn in circulation of newspapers everywhere, means the market for newsprint is ebbing substantially.

The third concern is one not as immediately apparent. The decline in the housing market in the United States has affected sawmills. And sawmills are the prime source of cheap fibre for the mill. With less chips leftover from less producing sawmills, the supply of chips is going down and the cost is going up.

However, Strang said looking not that far down the road, the production of power may be the saviour of the mill.

"We have unutilized electricity generating capacity. The production of power is as important, if not more important, than the production of pulp. That will help us diversify our revenue stream. And it insulates us from the U.S. dollar pressures because the electricity would be sold in Canadian dollars. That's the light at the end of the tunnel," Strang said.

In a year that should be a cause for celebration and not a source of angst for the operation, that light is one everyone wants to see.

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