The BC Supreme Court has approved a process to sell the San Group’s mill properties in Port Alberni, with bidding expected to start at the end of April.
The company is currently under creditor protection and owes nearly $200 million. The Royal Bank of Canada (RBC) and the Business Development Bank of Canada are the main creditors, collectively owed $150 million.
After San Group filed for creditor protection last year, RBC initiated the court process which brought in Deloitte Restructuring to monitor the company’s business and financial affairs.
The Langley-based San Group bought the Coulson Manufacturing sawmill in Port Alberni in 2017 and 25 acres of the paper mill site in 2018. The company’s new remanufacturing mill at the old paper mill property was hailed as an economic win for Port Alberni and was expected to be completed in July 2020, promising to employ up to 1,100 local workers. However, a late-night fire caused by welding did serious damage to the mill on April 29, 2020, leaving it running at diminished capacity until 2021.
In 2022, the Port Alberni Fire Department issued a standing fire order for San Group, after receiving a complaint that workers were sleeping at one of the mill sites. For safety reasons, the department said no one should be sleeping at the work site.
Last year more complaints revealed dozens of temporary foreign workers living in trailers on site, in sub-standard conditions. The Salvation Army helped move more than a dozen workers to temporary lodgings in Victoria after receiving complaints of human trafficking.
The Salvation Army’s actions prompted an investigation by the fire department on July 4. Afterwards the company threatened to sue the City of Port Alberni for trespassing, violating Charter rights, and other claims.
While reporting on the lawsuit threats, CHEK News contacted WorkSafe BC which said it had been keeping a close eye on the company since 2022, handing out 27 corrective orders and penalties of more than $78,000.
In April, 2024, a fire at the company’s Acorn mill in Delta rendered the facility inoperable.
In October last year, the company curtailed production at all its mills, including the Port Alberni facilities, blaming a lack of log supply.
On November 23, 2024, company management claimed it had lost $6 million in logs from the Coulson sawmill site after a storm on November 18. However, no evidence was found of any missing logs, and experts interviewed by Deloitte said “a loss of this size would be known to all in the area and recovery efforts would normally been commenced as soon as possible.”
On November 29, 2024, the San Group filed for creditor protection. It was supposed to expire on January 17, 2025, but it has now been extended to May 30 of this year so the company can fulfill all obligations for the sale to be completed.
