Midway mill fails to sell at auction
By Mona Mattei
It took less than 15 minutes to determine there was no buyer at the auction for the Midway Forest Products sawmill facility, but a deal in the works may yet come through for Fox Lumber Company based in Montana. Tim Murphy, president of James G. Murphy Inc. auctioneers, was on hand to do the auction with the three bidders during the sale on Friday, Sept. 18. Quintin Apedaile, director of operations for Fox, said he is hopeful that the deal will go through and that the company can salvage their investment at this point.
“We just didn’t have the money it would take that we could invest in it (the mill) to move it forward… At this point we feel we have to go to auction because if we wait longer the balance accruing against the mill as far as debt continues to grow,” said Apedaile. “So if we don’t turn those assets in and satisfy those obligations now the concern is in the very near future it won’t be enough to satisfy them. Maybe we’ve already surpassed that point.” Initially Fox only purchased the planer section of the mill to operate their small business venture – a value-added remanufacturing facility using waste lumber from the mill operations run by Pope and Talbot Inc. Apedaile explained that when Pope and Talbot went bankrupt in 2007, they had to make some tough decisions. “By the time we were up and running, Pope and Talbot went down, and that was really what made this a very appealing site,” said Apedaile. “They were such a good source of fibre instead of shipping stuff here. That made it more difficult to be profitable.” Apedaile said that with the overall downturn and other mill closures the Midway Forest Products ability to operate was severely impacted. “But we had already made a substantial investment to be here so when it (Pope and Talbot) went into bankruptcy court in order to protect our ownership interest (in the portion they owned) we had to get into the bidding. To our surprise not many other people did and we ended up getting the rest of the mill.” Since the market has not come around, Apedaile continued, Fox hasn’t been able to partner or find someone to buy the mill or run it. “The lumber industry is so terrible that everyone that’s in the industry doesn’t want to make an investment, is already worried about if they are losing or just breaking even so it’s been difficult.” The auction took place at noon in the mill site location office. There was a reserve set on the auction, but with the lack of bids the mill will be pieced up for auction in October should the pending deal for purchase not go through. Bids started at $2 million for a small portion of the site, and went to $3.5 million for the portion from the roadway to the east including the mill, and offices but excluding the old woods office and log yard. The full site did not make it to the bidding process.
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