St. Stephen will overcome the loss of about 65 jobs at the Arauco forestry mill, Mayor Allan MacEachern and others say. The company cites high costs for wood and natural gas and distance from markets as reasons to stop making particle‑board in St. Stephen by the end of the year.
     The company will still employ 120 people making Fibrex thin high-density medium-density fiberboard (MDF) in St. Stephen, the only place the company produces this material in North America, plant manager David Moffatt confirms. In fact, the company plans to add value to Fibrex by producing wainscoting. "We expect to be doing our first runs of wainscoting in several weeks," Moffatt says. "We hope to have further product developments into 2020."
     This opens a chance to rebuild employment. "It won't be to the numbers that are being impacted [by the lay-offs] but, yes," he says.
     "Well, I say we have to overcome. How's that?" Mayor Allan MacEachern replies on this latest economic setback.
     Along with the announcement that Arauco will stop making particle‑board in St. Stephen, the company offered early retirement and severance packages to workers on the Fibrex line, which could open jobs for some of the people facing unemployment. "Once the dust settles, we're going to start seeing what Opportunities New Brunswick, what the province, can do to expand on what they have and assist in any way we can to expand their line and grow again," the mayor says.
     Arauco announced this partial shutdown a week to the day after former New Brunswick Premier Frank McKenna told a St. Stephen Area Chamber of Commerce audience that people could no longer depend on big industry and government for jobs.
     Kendall Kadatz, the new president of Future St. Stephen, agrees. "The problem is, if you put all your eggs in one basket and the basket tips, then you're done, right?" he said in an interview following Arauco's announcement. "The key is not to rely solely on big industry."
     More than 100 new businesses have been established, or old ones expanded, in St. Stephen since 2014, and employers came to a job fair in April looking to fill 300 positions, Kadatz says. "We believe we're still in a net job‑positive situation," he says, with St. Stephen's population growing beyond the 4,415 counted in the 2016 national census.
     "I'd rather have that plus the jobs [at Arauco]," MacEachern says. Aside from the loss of work in the mill, this announcement affects truck drivers, wood deliveries, NB Power, fuel, trades contractors and others. "You're cutting that right in half," he says.
     Defunct businesses and industries litter the memory of this border town: the ax factory, soap factory, shoe factory, fertilizer plant, hockey stick plant, a metal foundry -- now home to Stewart Farms cannabis/tilapia enterprise -- and others.
     "St. Stephen's still going. Businesses close, businesses open, industry changes. The question isn't whether you lose jobs; the question is whether you make jobs, and are you staying ahead of the curve," Kadatz says.
     Some enterprises, notably Ganong Bros. candy‑makers, adapt and survive. Arauco hopes to do the same even if it will no longer make particle-board in St. Stephen. Moffatt says, "It's our goal to make this site as sustainable and [attractive] as possible. The site is very important."
     Flakeboard Co., as it was then named, began producing particle-board in Milltown -- later amalgamated with St. Stephen -- in 1960. The late provincial cabinet minister Norman Buchanan and other community leaders convinced German investors to fill the hole in Milltown after the cotton mill shut down in 1957. John Bottomley was mayor of St. Stephen, and Ralph "Buffy" Eagan was mayor of Milltown. The company has provided steady employment at high wages since then and added the Fibrex line in 1999, says Moffatt, who has worked at the mill for 20 years.
Arauco, a huge forestry company with global headquarters in Santiago, Chile, North American headquarters in Atlanta, Ga., and Canadian headquarters in Markham, Ont., acquired Flakeboard in recent years.
     The decision to stop making particle‑board in St. Stephen did not surprise MacEachern or Kadatz after Arauco opened a new mill to make the same product in Grayling, Mich., this year. "This announcement in St. Stephen started probably four years ago when they started building the other plant," the mayor says.
     "I think they've been pretty clear about this all along that this was something coming," Kadatz says. "They need more efficient larger facilities elsewhere that can operate on more efficient input costs."
     Lower energy costs "and lots of wood" closer to customers tipped the balance in favor of Michigan, says the mayor, who worked as a power engineer at Flakeboard for 12 years starting in 1999. "The talent pool of our workers is what kept them here as long as they have because they more or less all started here," he explains.
     Moffatt calls it "a complete coincidence" that this announcement came in the same year that Kelly Shotbolt, who has roots in St. Stephen, retired as president of Arauco North America.
New Brunswick Premier Blaine Higgs has cited the federal carbon tax as a factor in Arauco's decision. "Any added cost is not easy," Moffatt says, but he cites costs of wood and energy and distance to market as the big factors, echoing the views of MacEachern and Kadatz.
     The mill uses softwood residue from sawmills to make particle‑board, used for cabinets, countertops and decorative panels, Moffatt explains. Most people can find this material in furniture or cabinets in their homes.
     Fibrex, made from hardwood chips, goes "wherever you need high strength, low weight," such as chair backs, recreational vehicles and door covers, he explains. "We do not make thin MDF anywhere else," he says.
     The company cuts most of the hardwood for Fibrex as a sub‑licensee on Crown land, most of it licensed to Twin Rivers and J.D. Irving. The company buys very little from private woodlots. The provincial Energy and Resource Development Department confirms this but did not respond to a question on where the sawmill residue will go once Arauco stops making particle‑board in St. Stephen.
     New employment in St. Stephen includes two enterprises producing cannabis, also the new Ultramar filling station and McDonald's restaurant next to the Cannabis NB store on Route 3.
     St. Stephen continues to push for a hotel, and both Kadatz and MacEachern talk of other possibilities they are not quite ready to announce.
     St. Stephen's University president Jeremy Barham calls Arauco's announcement the "natural course of any business, particularly an export business." He contends, as do MacEachern and Kadatz, that there is more work in St. Stephen than there was five years ago. "More businesses are moving here than are slowing down, but we're never going to escape regular cycles, and businesses shrink and grow all the time. That's just part of life," he says.
     "I do know that we are in a better position to absorb the shock of this than we were four years ago," the mayor says. "That doesn't mean we're taking it well."