Vaughn Hodgson, general manager of the Pictou Road-based (Nova Scotia) company, said the decision wasn't an easy one to make.
"It was a decision made based on where the forestry industry is going," he said Saturday, (Jan. 21) just days after telling the employees about the plans.
"With the new regulations on the industry, I don't see the pulp mills being able to survive."
The biggest regulations that concern the Hodgson family include the fact that no full-tree logging is allowed and the elimination of clearcutting during the next five years.
Having worked in the forestry industry for 30 years, Hodgson, now 48, said none of the money provincial pulp mills received in recent years has gone to their contractors.
"We're tired of it," he said.
The family-owned company was established in 1989. Hodgson's father, McKay, is the president of the company and three of Hodgson's brothers are partners as well.
"It was a very hard decision. The pulp mill wasn't willing to negotiate rates. We've been trying for 20 years now and the rates never seemed to go up."
Hodgson's Chipping used supply to two mills - 85 per cent of its product went to Northern Pulp Nova Scotia in Abercrombie Point and the other 15 per cent went to NewPage Port Hawkesbury in Point Tupper.
Hodgson said his business suffered, in part, because of the demise of NewPage. The company shut down both of its paper machines in September, putting about 1,000 people out of work. Company officials said economic conditions led to that closure which resulted in about 650 people at the Point Tupper mill out of a job and another 350 independent forestry contractors affected before NewPage filed for creditor protection.
"We were hurt with NewPage. They got us for about $142,000," said Hodgson.
The general manager said the company recently had a discussion with Northern Pulp about its decision, followed by the closure announcement last Tuesday (Jan. 17) to its employees.
"They were shocked because we weren't in financial trouble. Employees can usually sense when there's financial trouble. But we figured rather than wait until we get to that point, we would close now. I feel really bad for the employees ... really bad ... but not for the mills."
Hodgson's Chipping will phase everything out between now and the middle of April. All the equipment has been sold to Ritchie Bros. Auctioneers, and an auction is being scheduled for the beginning of May.
The loss of Hodgson's Chipping is another hit to the area and follows numerous other business closures in Truro during the past year.
Colchester County Mayor Bob Taylor said Hodgson's Chipping closure was unexpected, but it's not a worst-case scenario for the area.
"I don't think the sky is falling," said Taylor.
"I was quite surprised when I heard it ... they run a good operation. I hate to see it (close) because they are good employers and because of the jobs but I respect their decision and we'll move on."
Truro Daily News
