Catalyst Extends Downtime at Snowflake Newsprint Mill

June 23, 2009 - Catalyst Paper said that its Snowflake recycle newsprint mill in northeast Arizona will be idled for an additional 10 days in July, bringing the mill's curtailments in July to approximately 20 days with nearly 300 employees affected by layoffs.

British Columbia-based Catalyst said the extended downtime is the result of the black liquor tax rebate for U.S. kraft mills, which is negatively affecting the mill's order book.

"The U.S. black liquor tax credit puts recycled paper mills at an enormous competitive disadvantage," said Richard Garneau, Catalyst president and CEO.

"Snowflake makes an environmentally desirable paper product in an environmentally friendly way, but cost-efficiency cannot overcome the subsidy represented by the tax credit. It is ironic that the black liquor tax credit arose from legislation that was supposed to help the environment and now threatens the well-being of an environmentally focused enterprise," Garneau said.

"Snowflake is already operating at less than full capacity due to the weak economy. A level playing field is critical to the future of this mill," Garneau added.

The Snowflake mill is a 100 percent recycled newsprint manufacturing operation and the second largest private employer in northeast Arizona. The mill consumes more than 480,000 tons of recycled paper annually that would otherwise end up in landfills.

Catalyst Paper manufactures diverse specialty printing papers, newsprint and pulp. The company operates six mills located in British Columbia and Arizona, which have a combined annual production capacity of 2.5 million tonnes.

Catalyst is headquartered in Richmond, British Columbia, Canada.

SOURCE: Catalyst Paper

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