Doman Industries Limited said its subsidiary Western Pulp Limited Partnership (Western) has reached an agreement in principle with the Communication, Energy and Paperworkers (CEP) Union of Canada Local 514 with respect to a restructuring plan for the Port Alice pulp mill. The mill is situated in the north of Vancouver Island, BC.

Western has a marketing plan which, coupled with increased capital investment and cost reductions, is aimed at improving its business. Doman said that global demand for cellulose pulp is on the rise.

Western is committed to $C32 million in capital and maintenance spending over the next five years, provided there is a cost reduction plan in place at the Port Alice pulp mill and the Government of British Columbia honors its commitment to supply 500,000 cubic meters of economically viable annual allowable cut (AAC) of fiber to Doman Western.

In order to help fund the capital requirements, all employees of Western will be asked to participate in a cost reduction program. CEP said it will support Doman Western in its plan provided that:

1. hourly and salaried employees are participants in the cost reduction plan;
2. the cost reduction plan shall be limited to a maximum of $C12.8 million or the cost reduction program has been in place for 2.9 years for hourly employees; and
3. the Government of British Columbia honors the AAC commitment.

The 162,000-tonne/year Port Alice pulp mill produces specialty-dissolving pulp for global markets. Its product is a highly purified form of cellulose used in the manufacture of rayon for yarns and fabrics, cellulose ethers for binders and cosmetics, nitrocelluose for paint lacquers and munitions and cellulose acetate for filaments and cigarette filters. Another mill at Squamish, BC, north of Vancouver, produces NBSK. www.westernpulp.bc.ca. PI

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