On February 1, 1973, the Labrador Liner Limited opened and started production in Stephenville. The mill included the latest advances in mechanization, process technology and pollution control. It was also built around one of the largest fourdrinier paper machines in the world. The Linerboard Mill was built in Stephenville through the help of Premier Joseph Smallwood, Javelin Corporation and the promoter John C. Doyle.
The mill operated through the utilization of the black spruce forest of Labrador. The idea was to cut spruce in Labrador and transport it in special 35,000 ton ships to Stephenville. There it would be processed in a brand new plant. This type of mill opened mainly because of countries in Europe who had a high demand for cardboard containers which were replacing the wooden crates. Thus this type of mill was feasible.
There were several reasons why Stephenville was chosen over other areas in Labrador. It provided a year round harbor for shipping, which Labrador lacked, and it was an established town (homes, highways, employees, etc...). If the mill had been built in Labrador these necessities would have to be brought in and this was not conceivable. Western Newfoundland provided a great forest potential whereas the Labrador forest has a very slow growth cycle. On these bases Mr. Smallwood said that it was the logical site for the mill. In addition it would help to rebuild the economy of Stephenville. The cost of the mill was not cheap. It was first estimated that it would cost $53 million, but by 1973 when the mill was ready to open the total investment including losses was around $252 million.
In the beginning, the Labrador Linerboard Mill employed 103 staff members and 416 union employees. The woods division in Labrador employed 50 staff members and 497 union employees. However, the mill was not a success from the beginning because of the high cost of raw material. The payroll was also high, with $5.5 million for the mill division annually and $3.4 million for the Labrador woods division annually. The mill was also costing the taxpayers of Newfoundland $2 million a month.
From 1974 to 1975 the mill lost $21 million which then increased to $34 million from 1975 to 1976 and to $41 million in 1977. The fact that mills in the United States were producing more cheaply did not help. In 1977 the mill decided to close with debts over $2 million and predicted losses for 1977 at $54 million. They decided to phase out over a four to six month period to use up the existing stocks of wood. On April 29, 1977, the mill closed.
Many of the reasons behind it's closure, besides financial problems, were: transporting wood from Labrador and other areas was expensive, wood was scarce, there were management problems and it was difficult for the mill to compete with the larger pulp and paper mills. The closure of the mill was a bitter blow to the people of Stephenville and its economy. This was the second time in twelve years they watched the town's sole industry disappear.
Abitibi Price has since purchased the mill for the production of newsprint and is the current backbone of the Stephenville economy.