Labrador Linerboard

This page is from a heritage partnered project. It was written in 1998 by students from Stephenville Integrated High School and edited by their teachers. It has not been vetted by the heritage website's academic editor.

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, which was flat wire machinery that formed the paper in a continuous web. 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 by exploiting the black spruce in Labrador. The idea was to cut and transport the wood in special 35,000 ton ships to Stephenville. The mill opened mainly because of the high demand for cardboard containers in European countries.

Choosing the Location

There were several reasons why Stephenville was chosen over areas in Labrador. It provided a year round harbor for shipping, which Labrador lacked, and it was an established town. Smallwood therefore argued that Stephenville was the logical site for the mill. In addition, it would help 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 was around $252 million.

Investment Losses

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, even from the beginning the mill was not profitable because of the high cost of raw materials. 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 and Labrador $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 a product more cheaply did not help. In 1977 the mill closed with predicted losses for the year at $54 million. The mill phased out over several months to use up the existing stocks of wood. On April 29, 1977, the mill closed.

Inevitable Closure

Many of the reasons behind it's closure, besides financial problems, were: transporting wood from Labrador and other areas was expensive, there were management problems and it was difficult for the mill to compete with the larger pulp and paper mills. The closure 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.

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