Forest industry veteran set to revive paper mill: company aims to be first to market with new product.

The pending new owners of a Thunder Bay forest products mill plans to install some European-inspired "new generation" technology to make specialty paper

Jay Gurandiano, a well-known Montreal paper industry veteran is heading up an ownership group seeking to convert the closed Abitibi Bowawter newsprint mill into a "technologically driven" plant in Thunder Bay.

The new venture, to be known as Superior Packaging Inc., has big plans to raise and invest $60 million for a sophisticated new coating machinery that will be fed with recycled paper, although the company will reserve the capacity to use virgin hardwood fibre if necessary

With a letter of intent from Abitibi Bowater for a deal in principle, Gurandiano says the new ownership group was in the final steps of putting together a sale agreement.

"There's nothing in the due diligence (process) that would stop us."

There was no disclosure of the sale price.

The former Abitibi Consolidated Mission Mill closed in February 2007 with the loss of 350 mill and woodland jobs, including under 200 unionized positions.

Gurandiano says obtaining financing has been a tough slog given economic conditions in U.S. and worldwide markets, but he expressed confidence it would be wrapped up this spring.

"We're working our way through it, it's just taken a little more time."

Though Gurandiano is guarded in identifying details of the new operation for competitive reasons, it will a specially coated paper used in various packaging applications such as agricultural and pharmaceutical products requiring light-weight paper.

"It's the kind of product that's not being produced in North America at the present time."

But he describes the developing North American market prospects for this kind of specialty niche product as "excellent."

"Unlike a lot of things that have happened in newsprint, these are markets that are growing and are not going to migrate to Third World countries because of lower costs."

In late March, Gurandiano returned from a two-week tour of five European mills using similar coating technology

Researchers from Lakehead University will also be involved in "very esoteric nano-technology coating applications."

Steve Hessian, a former Lakehead govenor; is the company's senior engineer and is handling that collaboration.

"I'm quite excited about that part of it," says Gurandiano.

Because of the sophistication of the operation, technicians from Europe were being brought in to work on conversion plans for the plant's single paper machine. A pulper will also be installed.

"It's going to be a mill that's going to be technologically-driven and very different from what's taken place before."

Once fully revealed, Gurandiano says people will see a major difference in the product than with standard newsprint.

"It's produced on a paper machine, but it's really high-end technology that drives this process."

At peak capacity, the mill will produce 185,000 tonnes annually and employ 80 people, including 60 unionized workers. The hiring process should start by September.

The Communications, Energy and Paper-workers Union agreed last winter to put a new collective agreement in place for the purposes of financing.

Any workforce hiring would likely be done in the fall.

Gurandiano says if all goes well with the coating technology, there may be some off-machining applications with additional equipment installed that would create more employment.

Though not familiar with the Thunder Bay mill at first, he was impressed by the speed and efficiency of the single paper-making machine on site through the due diligence process.

Gurandiano previously served as president and CEO of St. Laurent Paperboard in Montreal during the mid-1990s, prior to working for Avenor, a leading supplier of pulp and recycled newspaper.

He aims to have a sizeable ownership position inside a management group ownership. Talks have begun to source some provincial government money for the start-up.

By IAN ROSS

Northern Ontario Business