Fraser Papers to Shut Two Machines in Maine

June 27, 2007 - Fraser Papers yesterday said that it will initiate an business "optimization" plan that includes the permanent closure of two paper machines at its mill in Madawaska, Maine.

The machines will be shut down by Agust 26, 2007, Fraser said.

Fraser said the new initiative is designed to improve the financial performance of its specialty papers business. The plan involves a transition of the company's specialty paper business to its larger, more efficient paper machines, the permanent closure of the highest cost manufacturing capacity and a decreased reliance on fossil fuel with new energy reduction initiatives.

Fraser estimates savings from this optimization plan of an additional $14 million per year.

The plan announced yesterday includes:

  • The permanent closure of paper machines No.1 and No.2, representing 70,000 tons per year of freesheet paper capacity or 14% of the total plant capacity, effective August 26, 2007;
  • The transfer of specialty grades currently produced on these two paper machines to the remaining six paper machines at the Madawaska operation;
  • A focus on growth in specialty uncoated groundwood papers with the permanent closure of one off-machine groundwood coating line, previously announced on May 31, 2007; and
  • Specific energy initiatives, including the permanent closure of one oil-fired boiler and turbine, that will reduce green house gas emissions by 35% and oil consumption by 3.5 million gallons per year, effective October, 2007.

"The initiatives announced today will provide a much needed and immediate improvement to our business," said Peter Gordon, Fraser Papers' president and CEO. "Expected savings will be generated from reduced purchases of high cost market pulp, lower steam and power costs as a result of the closure of high cost, oil-fired boilers and higher manufacturing productivity.

"While we recognize the inevitable impact on individuals, families and the community, we believe it is the best course of action to ensure the long term success of our East Papers operations," Gordon added.

The changes will impact 135 employees at the Madawaska mill, including the 29 employees affected by the previously announced closure of the groundwood coating line.

Fraser Papers also said that it has completed a $10 million capital rebuild of the recovery boiler at its Edmundston, New Brunswick sulphite pulp mill.

The rebuild was completed during a recent 21 day outage and is expected to result in increased production in excess of 50 tons per day of pulp or 18,000 tons annually.

SOURCE: Fraser Papers Inc.

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