MDF Pembroke - More power to them
In April, it was announced Laurentian Valley Township's medium density fibreboard plant is gearing up to reopen. Now renamed Pembroke MDF, the plant was able to secure a supply of cheaper electricity to reopen the operation. Here, Ontario Energy Minister Bob Chiarelli helps announce the good news.
The Pembroke MDF plant is reopening in July for the same reason it shut down at the end of 2008 - electricity rates.
On April 4 it was announced the plant, formally ATC Panels and located in Laurentian Valley Township, was resuming operations, bringing in 110 workers and eventually expanding to a workforce of 140.
Key to this reopening is their participation in the Ontario government's Industrial Electrical Incentive program, which under a multi-year agreement provides new or expanding industries low-cost power.
During the formal announcement held at the facility, Jose Kofman, Pembroke MDF president, told a group of local VIPs, politicians, company officials, government staff and economic development people they always hoped to reopen the plant since being forced to shut it down at the end of 2008.
He said the MDF plant, which opened in 1997, ran straight into an economic perfect storm in 2008 which made it impossible to function.
This included a lessening in demand for fibreboard, increasing costs for wood fibre, with the final blow being a very steep increase in the price of electricity.
Under the IEI program, these electricity rates are frozen at low, close to "at cost" pricing for eligible companies which are expanding their operations.
Kofman said in June 2013, the company applied to the IEI program, and learned they were approved at the end of the year. Once this was signed, sealed and approved, they immediately set out to reopen the plant.
Ontario Energy Ministry Bob Chiarelli, who was on hand to personally offer his congratulations, said this shows the effectiveness of programs like IEI.
"Targeted programs like IEI improve the competitiveness of Ontario companies in an increasingly competitive global economy," Chiarelli said. "This is a step in the right direction for Ontario manufacturers to spur economic growth and create jobs, while benefiting from a reliable and cost-efficient electricity system."
Pembroke Mayor Ed Jacyno, who was in attendance for Pembroke MDF's announcement, said the IEI program was a good incentive which certainly was needed for the MDF plant to be viable. He said six years ago, around the time the plant was closed, it cost the company $400,000 annually for the electricity to run it. At today's prices, that amount zooms to $1 million.
Such a program likely won't benefit businesses within Pembroke itself, as it is an incentive of the province and Hydro One, while the city's power comes from Ottawa River Power Corporation.
Since the city is a shareholder in that company, the municipality and its residents enjoy significantly lower electricity rates than elsewhere.
Stephen Uhler is a Daily Observer multimedia journalist.