Quebec's forestry industry is getting a $100-million lifeline from the federal government, which includes a loan to a startup company that will set up shop in an abandoned pulp mill in west Quebec.

The company, Trebio, will get a $4-million combined loan to move into the old Smurfit-Stone pulp mill in Portage-du-Fort to manufacture energy wood pellets. Those pellets will be sold to residential, commercial and industrial markets in Canada, the U.S. and Europe.

"Today we celebrate another opportunity, another occasion where all three levels of government – municipal, provincial and federal – come together, work in partnership, get things done," said Foreign Affairs Minister Lawrence Cannon, who is the MP for Pontiac.

The Quebec government will also contribute $9 million to the new plant. The company estimates the startup costs will be close to $19 million.

Trebio says the plant will employ 160 people in the Outaouais over the next two years. It's estimated the plant will have an annual production of 130,000 tons.

The Smurfit-Stone Mill, located across the Ottawa River from Renfrew, closed in the fall of 2008, putting more than 200 employees out of work.