Catalyst to Invest $12 Million, Restart PM4 at Port Alberni

Feb. 14, 2008 - Catalyst Paper's Board of Directors has given the go to a $12 million capital upgrade for the thermo-mechanical pulp facility at the company's Port Alberni mill in British Columbia. In addition, Catalyst said it expects to restart the mill's PM4 by mid-2008. The machine has been idle since September 1, 2007.

Catalyst's Board also approved a $14 million early retirement and severance package associated with a new labor agreement.

The company said its decisions follow months of discussions with community and local union leaders on actions required to improve the mill's business climate and cost competitiveness.

"The two union locals – CEP 592 and 686 – are to be commended for reaching a landmark agreement that puts in place modern work practices and brings labor costs to competitive industry levels," said Richard Garneau, president and chief executive officer of Catalyst Paper.

"Knowing we have the support of our employees means we can move forward with the thermo-mechanical capacity increase project and return to a two-machine mill, with a significantly improved cost structure," he added.

Catalyst indefinitely curtailed PM4 – its highest cost machine – following repeated appeals to major stakeholders to change business conditions, including bringing the mill's property taxes in line with competitive jurisdictions. As the city's largest taxpayer, the Catalyst paper mill paid $7.1 million in 2007, approximately three times the Canadian average and more than twice the BC average in property tax per ton.

Port Alberni's city council has approved a gradual reduction of major industry property taxes over five years, Catalyst said.

"We acknowledge this is a first step, but we remind civic leaders that to be competitive today, our annual municipal tax bill in Port Alberni should be $2 million less than it is now," Garneau said. "We are looking to senior levels of government to also act on this critical tax issue to help municipalities improve the hosting conditions to attract industries."

Catalyst is a producer of mechanical printing papers in North America, headquartered in Richmond, British Columbia. The company also produces market kraft pulp and owns Western Canada's largest paper recycling facility. The company operates five mills within a 160-kilometre radius on the south coast of BC and has a combined annual capacity of 2.4 million tonnes of product.

SOURCE: Catalyst

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