Resolute Indefinitely Idling Its Groundwood Paper Machine at Ontario Facility

MONTREAL—Nov. 20, 2012—Resolute Forest Products announced the indefinite idling of the paper machine number 5 (PM5) and kraft mill at its pulp and paper operation in Fort Frances, Ontario. PM5 has an annual capacity of 105,000 metric tons of groundwood specialty printing paper, while the kraft mill has an annual production capacity of approximately 200,000 metric tons of market pulp.

Approximately 239 employees will be impacted by the idling.

“The markets for these products are challenging and are expected to remain so,” said Resolute President and CEO Richard Garneau.

The idling of paper machine is driven by the decrease in consumption, as well as the high value of the Canadian dollar. “We will monitor market conditions closely and work with key stakeholders to explore ways to improve the mill’s cost position,” noted Garneau.

“The kraft mill situation is particularly difficult given Fort Frances’ operating configuration and the recent decision by a key customer to stop consuming the pulp supplied by Resolute to its mill,” he continued. “Our kraft mill’s drying capacity is limited to about 40 percent of its production capacity, making it impossible to continue operating the mill in a profitable manner.”

The running down of fiber inventories and orderly shutdown of the Fort Frances kraft mill is expected to be completed by late November. PM5 will also continue to operate until late November. Resolute is exploring alternative product possibilities for the pulp mill, which will be idled in a manner that will protect the equipment.

Resolute Forest Products will work with affected employees, all levels of government and other local authorities on programs to lessen the impact of the idling. Employees affected by the move will also be considered for job vacancies and opportunities at other company facilities.

About Resolute

Resolute Forest Products is a global leader in the forest products industry with a diverse range of products, including newsprint, commercial printing papers, market pulp and wood products. The Company owns or operates 22 pulp and paper mills and 22 wood product facilities in the United States, Canada and South Korea. Marketing its products in close to 80 countries, Resolute has third-party certified 100 percent of its managed woodlands to sustainable forest management standards.

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