Catalyst Paper to Restructure Powell River Operation

Feb. 18, 2009 - Catalyst Paper today announced a restructuring plan to improve the cost competitiveness of its Powell River mill in British Columbia, Canada.

Catalyst said the detailed plan is expected to deliver annual cost saving of $13 million and was developed jointly with CEP Locals 1 and 76 in accordance with the commitment made in the new collective agreement reached last December.

"With the significant decline in paper markets in recent months, finding new ways to get work done more efficiently is a priority and the two union locals—CEP 1 and 76—have worked diligently with us to put a plan in place that addresses today's very challenging marketplace," said Richard Garneau, Catalyst's president and chief executive officer.

"The $80 per ton labor cost target and the sustainable taxation of our mills based on a consumption of service model are parallel priorities for the business. By making progress on both fronts, Powell River mill has a far better opportunity to be viable for the long-term," Garneau added.

Part of the plan calls for the elimination of 127 positions.

A restructuring cost of up to $12 million has been approved for implementation of the plan, Catalyst said.

The Powell River mill produces newsprint and uncoated mechanical specialty papers on three paper machines. The mill employess about 475 workers and has an annual production capacity to produce 33,000 tons of newsprint and 435,000 tons of specialty papers

SOURCE: Catalyst Paper

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