Valley furniture plant to close

A furniture manufacturer in the Annapolis Valley is shutting down, putting 200 people out of work.

Shaw Wood announced Tuesday that its factory in Cornwallis Park will close at the end of July because IKEA, its main customer, has cancelled its contract.

"It was a sad day to be in Cornwallis," said Bert Frizzell, president of the Shaw Group, who delivered the bad news to the employees.

"There was shock, there was disappointment. But it was not a complete surprise. We've kept our employees informed of our negotiations with IKEA."

Frizzell said because of the high Canadian dollar and competition overseas, Shaw Wood could no longer compete against other IKEA suppliers around the world.

Nova Scotia's Office of Economic Development says there is little the province can do to help the furniture manufacturer.

"The competitive pressures which that company has been subject to in its only line of business exceed the capacity of the government to provide the type of assistance that would see that company stay open," CEO Paul Taylor told a legislative committee Wednesday morning.

He said Shaw Wood notified the provincial government last month that its plant would close.

Marc Phillips, general manager of the Annapolis Basin Conference Centre (ABCC), called the closure a setback for the entire region.

Shaw Wood has been a cornerstone of the ABCC, formed in 1998 to revitalize the former military base. About 1,000 people are employed in various businesses in the centre.

The pine furniture manufacturer doubled its workforce to 200 in 2000 after exports reached almost $20 million, up from $4 million a year earlier.

Frizzell said the company is now working on a compensation package for its employees.