Northern Saskatchewan pulp mill scales back production over lack of rail cars

A pulp mill in northern Saskatchewan is slowing down production due to a lack of rail cars.

Graham Kissack calls it a frustrating situation after Paper Excellence said it has used all available local storage facilities at its Meadow Lake, Sask., mill.

“Having been through all the global market challenges with COVID, (we are) now finding ourselves in the position where we can’t ship our product out,” Kissak, vice-president of corporate communications with the company, told Global News.

“We’ve been having to put finished pulp on the ground since back in December, and now we’re finding ourselves in a position where we’re actually having to slow back the operational speed of our facility in Meadow Lake.”

The issue, Kissack said, is Canadian National Railway is not providing the cars the company historically needs to get their product to market.

Instead, he said they are left bidding at an auction for rail cars.

“For example, this week we asked for 154 cars. We’re getting 54 cars, and that’s a big impact,” he said.

“It’s frustrating to us when we hear that the cars aren’t available, but then we’re also invited to participate in essentially an auction process to buy more cars at a higher price.”

CN said its issues are due to the recent extreme weather conditions and supply chain issues.

“CN remains committed to working with customers and supply-chain partners as recent extreme weather in Western Canada, along with North America wide supply chain challenges have impacted cycle times for railcars used in the wood products industry,” CN said in a statement to Global News.

“We understand the frustration felt by our customers and we continue to do everything in our power to get their goods to market as quickly as possible.”

Kissack said the inability to get its product to market is creating a big challenge for the company.

“We cannot be profitable operating a mill that’s throttled back,” he said.

“These facilities are designed to run at full production rate, and we’re competing globally with other people all over the world.”

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