Paper Makers Continue to Cut Back

Paper companies continue to downsize to match shrinking demand.

The No. 4 and No. 5 newsprint machines at AbitibiBowater’s Thunder Bay, Ontario, mill will shut indefinitely later this month, according to company officials. The No. 4 facility has 146,000 tons/year of uncoated mechanical paper capacity and No. 5 can produce 250,000 tons/year of newsprint.

The company blamed high operating costs, particularly for hydro, combined with poor market conditions. About 360 employees will be affected when the closures start August 21.

What’s more, Montreal-based AbitibiBowater announced a 25% reduction in corporate office staff in Canada and the U.S. by the end of August as part of a plan to trim its overhead expenses by $100 million a year. Abitibi has about 700 employees in head office functions, including 400 in Montreal.

Because of Abitibi’s creditor protection, typical severance payments will not be paid, officials said, although accumulated vacation time will be honored. The company’s senior management team was reduced last month from nine executives to six.

Elsewhere, Fraser Papers’ Edmunston, New Brunswick, pulp mill will remain closed and more than 200 unionized workers will be laid off following the union’s rejection of the company’s final contract offer, according to CEO Peter Gordon. The pulp mill has 120,000 tons of capacity. Toronto-based Fraser is currently under creditor protection in Ontario and has until Oct. 16 to restructure, according to forest research industry group RISI.

Last month paper manufacturer Kruger announced it would cease production of coated paper at its Trois-Rivières, Quebec mill for an indefinite period starting Oct. 30, resulting in a layoff of 400 of the 950 workers there.

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