Tembec Taking Widespread Production Downtime

Feb. 3, 2009 - Tembec today said that it will take a series of market-related shutdowns which will affect all of its British Columbia facilities, as well as its newsprint mill in Manitoba and one additional sawmill in Ontario.

In British Columbia:

  • the Canal Flats and Elko sawmills, as well as the Cranbrook finger joint facility, will shut down for approximately eight weeks starting February 9, 2009.
  • the softwood Kraft pulp mill located in Skookumchuck will cease operating on February 23 for a six-week period.
  • the high yield pulp mill in Chetwynd was idled on Monday, February 2 and will remain down until market conditions support a resumption of operations.

The combined BC curtailments will affect approximately 975 employees.

In Manitoba:

  • the Pine Falls newsprint mill will shut down for two weeks, effective February 10, affecting approximately 300 employees.

In Ontario:

  • the sawmill in Hearst, which employs roughly 125 employees, will shut down for a six-week period beginning on February 9.

Tembec said the shutdowns are in response to depressed markets for lumber, pulp and newsprint.

In a press statement, Tembec noted, "Lumber markets and prices continue to be negatively affected by the ongoing housing downturn in the United States. Pulp markets have been impacted by the global economic slowdown and the related impact on packaging and other pulp consuming products. The North American newsprint market continues to experience a structural decline, compounded by the impact of the current recession on newspaper advertising."

The company said that the decision to curtail production was a difficult one.

"The extensive idlings announced today follow a careful review of current and forecasted market conditions. As difficult as these decisions may be for employees, contractors and communities, they are necessary to minimize losses, manage cash and reduce inventories," said Jim Lopez, Tembec's president and CEO. "We will obviously continue to monitor market conditions closely and will manage operating rates accordingly."

The Canal Flats and Elko sawmills have annual capacities of 180,000 mbf and 270,000 mbf respectively, while the Cranbrook facility produces 25,000 mbf of finger jointed lumber per year. The Hearst sawmill has an annual capacity of 160,000 mbf. The Skookumchuck Kraft mill produces 270,000 tonnes of softwood pulp per year, and the high yield pulp mill in Chetwynd has an annual capacity of 240,000 tonnes of hardwood pulp. The Pine Falls newsprint facility produces 185,000 tonnes annually.

SOURCE: Tembec

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