Davidson August 14, 2023
“Enough is enough!”
These are the words of Hubert St-Cyr, Chairman of the Board of Davidson Sawmills in Mansfield-Pontefract. He and his brother Bruno St-Cyr, Executive Vice President, have decided to throw in the towel.
Despite their best efforts over the past five years, the Quebec government has once again refused to grant them guaranteed wood supply reservations (GA - Garantie d’approvisionnement) to relaunch the Davidson industrial site.
“We’ve had the impression for the past few years that we’ve been tilting at windmills,” said Hubert St-Cyr. “The file is not moving forward.”
Without these GAs, management cannot restart the sawmill, a mill with equipment still in place and just waiting to be powered up to get going.
‘’Unfortunately, in 2018, most of our GA reservations went to companies outside the region,’’ says Hubert St-Cyr.
The company’s multiple attempts to recover GA have all been turned down by the Quebec government, which even cited the protection of woodland and mountain caribou to explain its latest decision. Such an argument raises eyebrows among the owners of Scieries Davidson, given that the coveted GAs are located in the Témiscamingue region, which is not home to any caribou.
The Davidson industrial site is located on 125 acres of land that has long been considered an industrial jewel, dating back to 1903. The site was acquired in 2007 and was in operation for only 18 months. The closure of Smurfit-Stone (pulp processing) in Portage du Fort in the fall of 2008, the softwood lumber crisis, the economic crisis and the temporary closure of the Bowater mill (the buyer of white pine chips) had forced operations to cease. The mill has never restarted since 2011, despite management’s best efforts.
The St-Cyr brothers are particularly irritated by the authorities’ lack of eagerness, as prices for noble woods - white pine and certain hardwoods - have been very high for several years, and would generate appreciable returns for the company. Some fifty well-paid jobs are at stake. To rebuild an industrial site of Davidson’s scale would easily cost $70 million. The current owners estimate the cost of restarting the business at around $9 million.
The company’s business plan, which the Quebec government is not questioning, called for the relaunch of sawing, drying and planing operations, coupled with a $70 million, 9.5 MWh cogeneration plant project.
The cogeneration plant was a key element of the project, as it would enable wood chips and residues to be processed on-site, in addition to generating electricity. Davidson Energy has a 25-year contract with Hydro-Québec to supply the power grid directly from the cogeneration plant. This plant could also have greatly helped the forest industry cluster in Ontario and Quebec to have a place to monetize their forest residues. The plant would have created 12 permanent jobs and major positive economic impact during its construction.
The envisioned project also had a Phase 2. Davidson Energy has signed an agreement in principle with a Canadian partner based in France to install a green fuel refinery for the lucrative aerospace market, fuelled by CO2 generated by the on-site cogeneration plant. The refinery alone would produce 32 million litres a year.
According to the business plan presented, this project would have generated investments of around $360 million and substantial annual revenues of $90 million.
Phase 2 also included an aquaculture project (rainbow trout), at an initial cost of over $20 million. This aquatic greenhouse would have been heated by the cogeneration plant. Phase 2 would also have brought a total of 40 additional permanent jobs.
The shareholders’ decision to dismantle and sell all or part of the facilities at the Davidson industrial site comes barely two months after the owners of Jovalco, located on Highway 148 in Litchfield, sold the sawmill equipment for $1 million to a Lanaudière-area company.
In recent years, the owners say they have never really felt fully supported by either provincial or MRC elected officials for the project to revive forestry activities, including the contribution of the cogeneration plant. We are witnessing the end of an era and a part of Pontiac’s history As the saga surrounding the relaunch of the Davidson facility seems to be over, it seems we are witnessing the end of an era in Pontiac’s history.
“Contacts have already been established with equipment manufacturers for the disposal of assets. We’ll be dismantling and selling our fixed and rolling equipment in the coming months,” says Hubert St-Cyr.
Pontiac Warden Jane Toller says she respects the decision of the St-Cyr brothers to abandon their project.
“I worked hard with the provincial authorities through the years to support the plan to reopen the Davidson industrial site,” she told THE EQUITY on Monday.
The warden said that the owners’ insistence on reopening a large sawmill first, instead of starting with a cogeneration plant, didn’t work to their advantage.
“The capacity for the government to guarantee access to pine resources is simply not there anymore,” she said.
Toller said she is confident that the Davidson industrial site will be attractive for new investors or new partners with a view to building a cogeneration plant, and possibly other activities such as aquaculture and perhaps eventually a sawmill at some point in the future.
“For a multitude of reasons, the owners are making a difficult choice, among them the lack of support from the current government,” Pontiac MNA André Fortin told THE EQUITY on Tuesday.
“Unfortunately, the CAQ government has never supported the project to revive the Davidson industrial site,” he said.
“The forest and its processing must continue to be part of the region’s economic future. More than ever, Pontiac residents are aware that our forest must be processed here, in the Pontiac, by local people. There’s no way around it,” said the MNA.
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