Resolute Forest Products Closing Quebec Paper Mill
MONTREAL—Competition from a government-subsidized mill in Nova Scotia, rising operating costs and foundering demand has prompted Resolute Forest Products to close its Laurentide paper mill in Shawinigan, Quebec, The Canadian Press reported.
The closure, which will take place in mid-October, will result in the layoff of 275 employees. The mill produces commercial printing paper.
"We made every effort to find a way to improve the Laurentide mill’s performance. Unfortunately, due to its cost structure and challenging market conditions, there is no economically viable option for the mill,” CEO Richard Garneau said.
Demand for specialty paper has dropped about 25 percent since 2009. Resolute also had to deal with the restart of Pacific West Corp.’s mill in Port Hawkesbury, Nova Scotia, which produces 360,000 tons of paper—nearly double Laurentide’s capacity of 191,000 tons. The Nova Scotia mill also benefited from C$124.5 million in provincial assistance for a 10-year period that coincided with its reopening in 2012.
Resolute, meanwhile, has to reconcile higher fiber costs in Quebec while operating in a mill that is 126 years old.