A $40 million particleboard plant has been given a second chance at life only days before it was to be dismantled by the auction company that bought it from the receiver.
The mothballed AgraFibre plant in Wanham, Alta., has been purchased by Northern Engineering Wood Products of Smithers, B.C., which makes particleboard out of wood products.
Richard Norton, general manager of the Smithers plant, said manufacturing particleboard from wood or fibre is basically the same process.
A crew of engineers and business analysts will spend the next four to six weeks assessing the AgraFibre plant, which was designed to turn fescue straw into particleboard. They will decide if the Wanham plant should continue to produce particleboard from fescue, if it should be converted into a wood particleboard plant, or if it should be relocated.
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“We’re not ruling anything out,” Norton said.
Put in receivership
The AgraFibre plant had only operated for a few months before a court-appointed receiver placed the plant into creditor protection and then receivership. The plant had been plagued by a combination of start-up cost overruns and design problems.
Century Services Inc., a Calgary-based auction and salvage company, bought the plant for $2.5 million after a six-month search by the receiver for a buyer.
Bruce Maclennan, president of Century Services, said it was about to begin dismantling the particleboard plant when the unsolicited buyer appeared. He said the plant was sold for a “fair figure.”
Norton said Northern Engineering was familiar with the plant. Last September an Agrafibre investor had invited Northern Engineering to look at it in operation.
Norton said that like other potential buyers, Northern Engineering never bid on the plant because it thought the brand-new facility would be too expensive.
“Everyone thought it would go a lot higher.”
