Thursday, June 07, 2007

Dollar hammers forestry industry

Dollar hammers forestry industry
Each cent increase is a $150M hit

The Gazette

Wednesday, June 06, 2007

The rising value of the Canadian dollar is cutting deeply into the lifeline of Quebec forestry companies, according to the industry's council, which estimates that every penny increase takes out at least $150 million a year in industry revenue.

The currency crunch comes amid dismal market conditions and growing concerns that another round of mill closings are coming, Guy Chevrette, president of the Quebec Forest Industry Council, said yesterday.

The average Quebec sawmill has lost an estimated $1.5 million since the beginning of the year, Chevrette said in a statement. "For a pulp and paper plant of 300,000 tonnes, that (loss) is close to $20 million."

Late Friday, Tembec Inc. announced that it would shutter its coated-paper mill in St. Francisville, La., for an indefinite period

The shutdown, due July 31, will affect about 540 employees.

The company, which cited "challenging market conditions in terms of both price and demand," noted that attempts had been made to improve the overall financial performance of the mill.

Yesterday, the president of Canada's largest forestry union took a swipe at forestry companies at a labour convention in New Brunswick.

"Employers, especially in the forestry sector, have deliberately taken the money they have earned from our publicly owned natural resources and invested them elsewhere in the world," Dave Coles, president of the Communications, Energy and Paperworkers Union of Canada, told convention delegates.

He was responding to news that the UPM Kymmene paper and ground wood mills in Miramichi, N.B., will shut down for nine to 12 months, and that four more mills in Quebec are facing temporary shutdown.

"These communities are a microcosm of what is going on in more than four dozen communities from coast to coast to coast," he said, noting that in the past three years, more than 12,000 pulp, paper and sawmill workers have been put on the street across Canada.

"Forest companies are investing those good Canadian dollars in places where workers can most easily be exploited. And then they have the nerve to say Canadian workers can't compete."

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