Former Bowater Mersey Paper mill auctioned off in pieces

An auction of the shuttered Bowater Mersey Paper mill continues for a second day at a hotel in Liverpool on Nova Scotia's South Shore, where 300 bidders have registered in person or online.

The assets of the mill, which was shut down in June 2012 by Resolute Forest Products, are being sold off in 3,200 separate lots.

"This is a major auction. It's going to take two days to get through it," said Mike McIntosh, a vice-president of Vancouver-based Maynards Industries, an auction house.

Sale items range from trucks, pumps and motors to paper mill specific machinery such as chip handling equipment and an entire wastewater treatment plant.

McIntosh said this is the third Canadian pulp mill his company has auctioned off in three months.

"There's a lot of excess capacity. Markets have been down. There's been a lot of sales," McIntosh told CBC News.

Jonathan McClelland, one of the small bidders, bought general equipment for a small hay pellet mill he's planning to open at the old Britex textile plant in Bridgetown.

"There's a transition in the economy. Some industries are going up and some are going down," said McClelland, the general manager of West Nova Agro Commodities Limited.

"You need to be saving money. Wherever you can get it cheaper it's good business to do that."

Some of the bigger ticket items like the mill's presses will be picked up by companies supplying paper industry survivors, said Syed Saif of NRI Global, which bought the assets from the Nova Scotia government and is now auctioning them off.

"It's a cost-cutting initiative. You can buy a surplus item for 10 per cent of the actual price and sell it to the paper mills so they can be competitive," Saif told CBC News.

$500K loan for Cellu-Fuel

While the Bowater assets were being auctioned off on Wednesday, at the 90-year-old mill site federal and provincial officials announced more government assistance for Cellu-Fuel, a small startup that is moving into the old Bowater property.

Cellu-Fuel intends to make diesel from low value wood fibre in a small petrochemical pilot plant later this year.

"A business that can be sustainable needs to be created," said Chris Hooper of Cellu-Fuel, holding up a vial of diesel fuel made with Nova Scotia red maple.

The project is getting a $500,000 loan from the Atlantic Canada Opportunities Agency. Last year, the company got a $1.5-million loan form the province of Nova Scotia.

When it starts up, the pilot project will produce 1.5 million litres of diesel per year and employ between five to seven people. If it ramps up to full commercial production, 30 people would be employed a far cry from the hundreds who used to work at the pulp mill.

Gerald Keddy, the MP for South Shore-St. Margaret's, said the project must be put in perspective.

"You're not immediately going to start something up that's going to replace what the pulp and paper industry was in the province. This is one of those steps along the way," Keddy told CBC News.

Meanwhile, the auction house hopes to generate $3 million in sales from Bowater's assets.