Canadian Manufacturing

Resolute completes realignment, reopens Gatineau mill

by Ross Marowits, The Canadian Press   

Canadian Manufacturing
Financing Operations Mining & Resources finance Forestry Manufacturing

Changes have trimmed Quebec-based pulp and paper producer's newsprint capacity

MONTREAL—Resolute Forest Products says it has completed the major realignment of its paper mill network with the restart of its facility in Gatineau, Que.

The mill is reopening as a lower-cost operation thanks to a new labour agreement, the operation of just one machine and a co-generation power plant set to begin operation in June.

The facility will employ 130 workers, down from 330 when it was shut in April 2010.

Chief executive Richard Garneau said the mill will produce newsprint that can be sold in North America or for export elsewhere, a market that has grown to represent 47 per cent of sales.

“There are a lot of containers that return empty from Montreal to Asia so one of the advantages we see is the flexibility and opportunity also to ship overseas,” he said in an interview.

The reopening in Gatineau follows the restart of operations in Dolbeau, Que., and the closure of less efficient plants and machines elsewhere in the United States and Canada.

Overall, the changes have trimmed the Quebec-based pulp and paper producer’s newsprint capacity.

Although he doesn’t foresee other reopenings, Garneau said production could still be tweaked at its 11 mills to adjust to market dynamics.

Among the mills that face uncertainty is the one in Thunder Bay, Ont., whose 300 employees produce about 500,000 tonnes annually of paper and pulp.

Resolute last week announced a two-week idling of the remaining paper machine there.

But Garneau said the mill’s access only to the North American market puts it at risk as newsprint demand continues to fall.

“It is a mill that may be affected by some temporary outages to adjust our supply with our customer demand,” he said.

The company is also seeking a tax reassessment that would lower the value of the mill in Northwestern Ontario to $29-million, retroactive to 2009.

The mill was once worth $100-million but is now valued at $72-million.

Garneau said that’s still too high given how the operations have effectively been cut in half.


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