VANCOUVER—Fortress Paper Ltd. said it will be forced to temporarily shutter its Quebec dissolving pulp mill due to “uneconomical” global market conditions.
According to the Vancouver-based firm, the specialty mill in Thurso, Que., about 50 kilometres northeast of Ottawa, will take “market downtime” of approximately 10 weeks starting Dec. 22.
Fortress said the decision to halt production at the facility comes after an interim duty imposed by China’s Ministry of Commerce on the import of Canadian dissolving pulp makes it uneconomical to continue producing the product.
Dissolving pulp is used in the making of products derived from cellulose.
The company also said the current market price for northern bleached hardwood kraft pulp is not sufficient to warrant production.
“As a result of a thorough evaluation of the current economics at the mill, the board of directors of Fortress Paper has determined that the fiscally prudent action is for the (Thurso) mill to take approximately 10 weeks’ market downtime, subject to prevailing market conditions,” Fortress CEO Chadwick Wasilenkoff said in a statement.
“This will result in a reduction of the cash burn based on current market prices and the current preliminary duty that has been imposed.”
Employees at the mill are being encouraged to take holidays during the shutdown.
According to Fortress, the closure of the mill will reduce the scheduled plant shutdown in June 2014, and will also allow the company to manage inventory build-up.
“During this downtime, we will continue to implement various operational improvements that will bring our overall cost structure down, as well as proactively focus on preventative procedures to enhance the mill’s productivity and reliability when it resumes operation,” Wasilenkoff said.
“We still have confidence in the future pricing and prospects for dissolving pulp as the market adjusts to the impact of the duty and future growth demands.”