Resolute announces indefinite Idling of pulp and paper operations at Calhoun, TN
The company stated that it will work with union leadership and will apply the mill's collective agreement and applicable federal and state laws as well as provide severance benefits to those directly affected.
Mining & Resources
Pulp & paper
MONTREAL — Resolute Forest Products Inc. announced the indefinite idling of pulp and paper operations at its Calhoun, TN mill. Tissue manufacturing and converting will continue at the site, and the adjacent distribution centre will remain in full operation.
The company stated that it anticipates the decision will affect 350 hourly and salaried positions at the Calhoun mill. The facility, which employs a total of 545 people, has an annual capacity of 147,000 metric tons of pulp and 149,000 metric tons of paper as well as 60,000 metric tons of premium tissue.
“We have taken the very difficult decision to indefinitely idle pulp and paper operations at Calhoun knowing how hard this is for the affected employees and their families,” said Remi G. Lalonde, president and chief executive officer in a statement.
“Success has proven elusive at Calhoun’s pulp and paper operations, despite the best efforts of our dedicated employees and significant investments of time, energy and resources over the last few years.”
The company continues to accumulate significant financial losses at the mill, even with the current strong market conditions for both the pulp and uncoated freesheet paper it manufactures. On a trailing twelve-month basis ending Sept. 30th, the pulp and paper operations in Calhoun produced an operating loss of $62 million before corporate expense allocation, including a depreciation expense of $10 million. In addition to these financial losses, the Calhoun mill faced additional significant production upsets in November and December.
The company stated that once it has completed the period of indefinite idling, it anticipates an improvement in its overall operating income which currently ranges from $35 million to $40 million. The company stated that this reflects the lost pulp integration benefit with its tissue manufacturing of approximately $15 million and approximately $5 million from ongoing costs associated with closed site maintenance.
The company stated that it will work with union leadership and will apply the mill’s collective agreement and applicable federal and state laws as well as provide severance benefits to those directly affected. Resolute will also engage government officials and other local authorities in an effort to mitigate the impact of the indefinite idling.