David Graham, Normiska's president, says his company has signed a letter of intent with Weyerhauser Inc. and is negotiating to secure a supply of 160,000 cubic yards of bark material from Weyerhauser's Ear Falls plant.

Normiska intends to ensure a steady supply of raw material to avoid any future disruptions to its Fort Frances-based operations like the one it endured during and after last year's Abitibi-Consolidated strike.

The company signed a 20-year supply agreement with Abitibi-Consolidated in 1997 to accept a minimum of 100,000 cubic yards of bark waste annually for a fee of $9.75 per cubic yard paid to Normiska for the first three years.

Normiska will then pay Abitibi Consolidated a negotiated market price for the bark waste supply for the remaining term of the contract.

Normiska produces refined and unprocessed sphagnum peat moss, pine bark mulches and composted pine bark for export to the upper mid-west U.S.

The company has a 1,450-acre peat bog in Miscampbell, 14 kilometers from its current Fort Frances site, but must source the bark and mulch from another source.

"I'm confident we'll have a (peat moss) supply for 25 years," Graham says. the 20-year bark supply agreement with Abitibi is now two years old, but Graham says that future labour or production disruptions could paralyze his company if he relies on just one supplier.

"It had a large impact on our start-up" Graham says of last year's strike.

We anticipate something in the order of half a million (dollars) in gross cash flow from bark and $600,000 to $900,000 in gross sales" less than projected, he notes.

"I think it was prudent to not be reliant on a single source."

Tradenamed "Normiska Materials, the company's products are distributed to plant growers, professional gardeners and turf and lawn care specialists among others in the horticulture industry.

Normiska is also conducting some basic research into methods to recover waste by-products of pulp and paper operations including clarifier sludge and bark from other species for horticultural uses.

Graham says the entire business plan grew from emerging and anticipating demographic trends.

He and founding partner John Arnold now company chairman and chief financial officer reasoned that an aging population would start to take greater interest in their gardens, gold courses and lawns, as well as decorative ground cover like mulch for weed suppression and pathways.

Normiska will begin harvesting 157 acres of sphagnum peat moss in mid-June and continue to the end of October. A loose-bale pager has been installed and a baling line will be delivered by mid-July to Fort Frances processing facility.

From 11 to 15 staff will work at the bog during the summer, and the processing plant will operate with a reduced staff year-round.

Graham says the U.S. demand is "huge" and the company has proved that it can deliver the products to professional growers and landscaping distributors in the mid-West U.S.

Despite the stall during start-up, Normiska anticipates first-year gross revenue of roughly $8 million. Graham cites the impact of the strike and a rainy early growing season in Minnesota as factors that have cut into the revenue stream.

Normiska is considering retail distribution, but Graham says it will have to establish an adequate supply chain before it can move into that territory.

He adds that the southern Ontario market is saturated so the company will continue with its marketing strategy to advance carefully throughout the U.S. mid-West where he expects double-digit growth based on recent performance.

"Right now demand in this region means we have our hands full," he says.

The company went public last year and trades on the Canadian Dealing Network under the symbol NORP.