Tembec shuts Louisiana paper mill, 540 jobs cut
CALGARY, Alberta, June 1 (Reuters) - Tembec Inc. (TBC.TO: Quote, Profile, Research) said on Friday it will shut its coated-paper mill in St. Francisville, Louisiana, at the end of July, cutting 540 jobs.
The Canadian paper maker said high costs and inconsistent production at the mill, and what it called "challenging market conditions in terms of both price and demand," provoked the closure.
The shutdown is the latest of a series of facility closures by Tembec over the past year. The company has been cutting capacity and looking to boost margins at its operations.
In a statement, Tembec chief executive James Lopez said the company had unsuccessfully attempted to boost the profitability of its only coated-paper mill last year by lowering costs and changing its product mix.
"Despite these changes this facility continues to be hampered by high energy costs, low machine productivity and difficult market conditions," the statement said.
Tembec said it is reviewing alternatives for the St. Francisville operation but offered no other details.
The mill has a capacity of 325,000 tons of coated and specialty papers used in catalogues, magazines and for cover stock.
Tembec shares were unchanged at C$1.18 on Friday on the Toronto Stock Exchange. The stock has dropped 22 percent over the past 12 months.
($1=$1.06 Canadian)
((Reporting by Scott Haggett, editing by Peter Galloway; scott.haggett@reuters.com; Reuters Messaging: scott.haggett.reuters.com@reuters.net; +1 403 531-1622)) Keywords: TEMBEC/CLOSURE
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Showing posts with label tembec. Show all posts
Showing posts with label tembec. Show all posts
Tuesday, June 26, 2007
Monday, June 04, 2007
Tembec to idle its coated paper mill located in St. Francisville, Louisiana
Tembec to idle its coated paper mill located in St. Francisville, Louisiana
Temiscaming, Quebec, June 1, 2007 – Tembec today announced that its coated paper mill located in St. Francisville, Louisiana will be indefinitely idled, with a target date for idling of July 31, 2007. It will affect approximately 540 employees.
The St. Francisville mill has a capacity of 325,000 short tons of coated and specialty papers, primarily used in catalogues, magazines and cover stock. Tembec acquired the facility in June 2001 by way of a Chapter 11 bankruptcy proceeding involving the mill’s former owner, Crown Paper Co.
A number of factors have combined to make this decision necessary, according to Dan Alexander, Executive Vice President and President, Paper Group. “The effect of challenging market conditions in terms of both price and demand, the inconsistent performance of the mill in terms of production, the increased cost of purchased energy, and the high manufacturing costs at this site have resulted in a situation that could not be sustained. While there has been progress during the past year, the overall financial performance of this site has been and continues to be unacceptable,” said Mr. Alexander.
The decision to idle St. Francisville is consistent with the recovery plan that was announced last year by Tembec President and CEO, James Lopez. Margin improvement at all manufacturing locations is central to this plan and the Company had indicated that, where no long-term solutions could be identified and implemented to achieve this goal, necessary action would be taken.
“Significant steps were taken in 2006 to lower the operating costs of this facility and upgrade the product mix. Despite these changes, this facility continues to be hampered by high energy costs, low machine productivity and difficult market conditions. The Company will continue to evaluate options to improve the profitability of this site and will take all available steps to ensure its customers will not experience supply interruptions,” said Mr. Lopez.
Tembec indicated that it is reviewing the full range of alternatives for this site. The Company would not speculate on the outcome of this review process.
“Decisions of this nature are never easy to make, and Tembec regrets the impact of today’s announcement on employees, their families and the St. Francisville community,” concluded Mr. Alexander.
Tembec is a large, diversified and integrated forest products company. With operations principally located in North America and in France, the Company employs approximately 9,000 people. Tembec’s common shares are listed on the Toronto Stock Exchange under the symbol TBC. Additional information on Tembec is available on its website at www.tembec.com
Temiscaming, Quebec, June 1, 2007 – Tembec today announced that its coated paper mill located in St. Francisville, Louisiana will be indefinitely idled, with a target date for idling of July 31, 2007. It will affect approximately 540 employees.
The St. Francisville mill has a capacity of 325,000 short tons of coated and specialty papers, primarily used in catalogues, magazines and cover stock. Tembec acquired the facility in June 2001 by way of a Chapter 11 bankruptcy proceeding involving the mill’s former owner, Crown Paper Co.
A number of factors have combined to make this decision necessary, according to Dan Alexander, Executive Vice President and President, Paper Group. “The effect of challenging market conditions in terms of both price and demand, the inconsistent performance of the mill in terms of production, the increased cost of purchased energy, and the high manufacturing costs at this site have resulted in a situation that could not be sustained. While there has been progress during the past year, the overall financial performance of this site has been and continues to be unacceptable,” said Mr. Alexander.
The decision to idle St. Francisville is consistent with the recovery plan that was announced last year by Tembec President and CEO, James Lopez. Margin improvement at all manufacturing locations is central to this plan and the Company had indicated that, where no long-term solutions could be identified and implemented to achieve this goal, necessary action would be taken.
“Significant steps were taken in 2006 to lower the operating costs of this facility and upgrade the product mix. Despite these changes, this facility continues to be hampered by high energy costs, low machine productivity and difficult market conditions. The Company will continue to evaluate options to improve the profitability of this site and will take all available steps to ensure its customers will not experience supply interruptions,” said Mr. Lopez.
Tembec indicated that it is reviewing the full range of alternatives for this site. The Company would not speculate on the outcome of this review process.
“Decisions of this nature are never easy to make, and Tembec regrets the impact of today’s announcement on employees, their families and the St. Francisville community,” concluded Mr. Alexander.
Tembec is a large, diversified and integrated forest products company. With operations principally located in North America and in France, the Company employs approximately 9,000 people. Tembec’s common shares are listed on the Toronto Stock Exchange under the symbol TBC. Additional information on Tembec is available on its website at www.tembec.com
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