Paper Excellence Canada to Indefinitely Curtail Paper Operations at Catalyst Crofton Mill

The Crofton Mill has two paper machines — C2 and C3 — and two pulp lines. The mill has the capacity to produce 320,000 tonnes per year of printing / packaging papers and 380,000 tpy of NBSK pulp.

Jan. 25, 2024 - Paper Excellence Canada today announced the indefinite curtailment of paper operations at the Catalyst Crofton facility located on Vancouver Island, British Columbia, Canada.

This decision affects approximately 75 employees.

According to Paper Excellence, market dynamics, inflationary pressures on raw materials, energy cost opportunities, and a lack of local domestic fiber supply resulted in substantial increases in operating costs. These pressures have materially impacted the current and future financial viability of the paper operation.

"We recognize the difficulty this decision has placed on both our employees and the Cowichan Valley community," said Blair Dickerson, Vice President, Public Affairs. "We will work to minimize negative impacts wherever possible."

A Look Back

The Crofton pulp and paper mill had experienced a number of short-term curtailments of its paper production operations in years past, but this latest, longer-term curtailment began in December 2022. "We expect to operate Crofton's paper machines for 60 days following this announcement," the company said in an October 2022 press release.

Paper production then ceased on the mill's two paper machines — C2 and C3 — in early December 2022. The company cited weakening Chinese paper markets and escalating costs of chemicals, energy and wood fiber.

However, in January 2023 the situation looked brighter when Paper Excellence announced that it would be investing nearly $50 million to upgrade the Crofton mill's paper operations and towards reductions in its carbon footprint.

"The C2 paper machine will be transformed to produce stronger, water-resistant paper grades that can replace single-use plastics. The investment also reduces natural gas consumption through more efficient use of waste bark fuel in the mill's boiler," Paper Excellence said in a press release.

But the investment did not include the C3 paper machine. "The C3 paper machine at Crofton will remain indefinitely curtailed," the company stated.

Pulp Operations to Continue

Currently, the mill's pulp operations, which supports approximately 400 employees, will continue production during the indefinite paper curtailment.

Going forward, Paper Excellence said the Crofton team will focus on making the remaining pulp operations cost competitive and aligned with our overall business strategies and direction.

Paper Excellence noted it will continue to supply its customers with products typically made at Crofton from other mills within the Paper Excellence Group where possible. The company remains fully committed to growing the specialty business.

Paper Excellence also conveyed thanks to both federal and provincial governments for their efforts to support Catalyst Crofton's paper operations. "The company will respect the terms and conditions of all contribution agreements affected by this indefinite curtailment and will work with the appropriate government agencies on the next steps."

Paper Excellence Canada, headquartered in British Columbia, is a diversified manufacturer of pulp and specialty, printing, writing, and packaging papers in Canada with a production capacity of over 2.5 million tonnes annually.

SOURCE: Paper Excellence Canada