Dollar parity forces 'gut wrenching' mill closure

The forestry industry in New Brunswick was dealt another blow on Thursday as 70 people arrived at work at M.L. Wilkins and Son Ltd. to find they no longer had a job.

The family-run mill has been producing spruce and fir lumber in metric sizes required by the British and European markets, which gave the company an edge over other mills selling entirely to the American market.

But parity with the U.S. dollar hashit the lumber exporter hard.

"At this point in time we have to stop and assess what the currency is doing to our business and look that over," said Brent Wilkins, whose father started the operation in 1969.

"We are hoping it's only a temporary shutdown of two or three weeks and get things back up and running but not knowing the exact answer, I am calling it indefinite at this time."

Wilkins has been operating just outside of Fredericton for almost 40 years and has been one of the only lumber businesses in the province exploring new markets in Europe.

Its ability to sell overseas in light of the glut of softwood lumber in the United States had kept the business going while other mills around the province shut down over recent months.

Mills in Juniper, Petitcodiac, Blackville and Miramichi have closed their doors, while about one-third of the 63 sawmills in New Brunswick are operating on reduced hours.

A closed sign greeted employees when they arrived at work on Thursday morning and they were told to return to their homes.

Wilkins said the decision to close was "gut wrenching" but that there wasn't much choice as the rising Canadian dollar makes it harder for the company to turn a profit.

"It's been very tough for five years now, and we just seem to have to take a break," he said.

Mill manager Herbie Eldridge said the company tried to hold on in the industry as long as it could.

"Everybody that's worked here has worked hard to try to make it work in a very, very tough economic situation, mostly factors that nobody in our industry can control," said Eldridge.

It will take more than new markets to save New Brunswick's forest industry, Natural Resources Minister Donald Arseneault said.

"They have to change the way they do things," he said. "They have to not only find new markets but also look at more value-added products."

This isn't the first time the Wilkins mill has shut down because of financial difficulty. Operations were put on hold for a month in the summer of 2006.

A skeleton crew is being kept on at Wilkins to complete a final inventory and prepare an order to be shipped to England.