Cascades to Cease Kraft Paper Operations in East Angus, Quebec

Cascades' East Angus mill produces natural and bleached Kraft papers made of virgin and recycled fibres. The mill is slated for closure by October 3.

July 9, 2014 - Cascades Inc. announced today that it will cease its Kraft paper manufacturing activities in the East Angus (Quebec, Canada) plant because of unfavourable market conditions and the failure of discussions concerning the plant's transfer and turnaround.

The company emphasized that it is important to note that this announcement does not concern the coated boxboard manufacturing plant located in East Angus.

Close to 175 employees will be affected by the closure, which will come into effect by October 3, 2014.

By closing the plant, Cascades is withdrawing from the Kraft paper sector definitively.

"With the arrival of new competitors that convert newsprint paper machines to produce Kraft paper, and the ongoing weakening of market conditions for our products, the East Angus plant has not managed to maintain a competitive edge in the market despite significant investments and serious recovery efforts," explained Luc Langevin, President and Chief Operating Officer of Cascades Specialty Products Group.

"Last November, we announced to employees our decision to withdraw from the industry. At the time, we offered them the plant debt free. After several months of ongoing efforts on the part of buyer Gino Levesque, the Quebec government and Cascades to come up with a financial package, the project was abandoned because of a lack of new investors. With the failure of the turnaround project and the loss of numerous key employees, today we are forced to announce the end of these activities," Langevin said.

Mario Plourde, President and CEO of Cascades, stated, "Naturally, we are very disappointed that the project failed. However, we would like to thank the employees' provisional committee, the buyer and the Government of Quebec for the work they put into the project over several months in the attempt to save jobs.

"Since our strategic orientations are focused on growth in the packaging, tissue paper and recovery sectors, it became impossible to keep the plant open with its inability to regain profitability. Following today's announcement, Cascades will assume all of the plant's responsibilities, notably the employee pension plan," Plourde explained.

To assist the employees affected by the shutdown, Cascades said that it will do everything in its power to relocate personnel to other units, including working with the union and the governments to reduce the impact of the announcement on the workers and the community.

SOURCE: Cascades Inc.