AN ELLESMERE Port paper mill is unaffected by a massive cost-cutting exercise by the international group which owns it.
Just a month after the merger of Abitibi Consolidated with Bowater, the paper-making giant which resulted, Montreal-based AbitibiBowater Inc, has announced it is to close or temporarily shut down several mills in Canada and the United States.
The moves come as part of an action plan to deal with weak newsprint markets and the Canadian dollar.
The belt-tightening extends to shareholders, as AbitibiBowater said it would suspend its dividend and revisit the decision “once clear progress has been made to achieve its financial targets.”
However, there is no mention in the announcement, made late last week, of Ellesmere Port’s Bridgewater Mill in North Road, which employs 285 people and produces 208,000 tonnes of newsprint a year.
The company, which said the plan would help it save $375m by the end of 2009, is also planning $500m in asset sales and has asked its unions to reopen current contracts to look for ways “to reduce overall labour costs and provide enhanced flexibility in the workplace.”
The announcement adds that a second phase of closures could take place by mid-2008. Final decisions regarding the actions to be taken and the locations impacted would be confirmed in the second quarter of next year.
Executives said they hoped to involve employees in the company’s battle to stay competitive and turn a profit in the face of a rapidly changing market.
Mills in Shawinigan, Quebec and Dalhousie, New Brunswick are to be permanently closed.
Two other mills in Mackenzie, British Columbia and Donnacona, Quebec will be indefinitely closed. Operations at two Mackenzie sawmills that support the paper mill will also be put on hold.
The shutdowns will affect at least 1,000 workers and bring job losses in the sector to more than 20,000 over the last two or three years.
AbitibiBowater, the third-biggest paper producer in the world ranked by capacity and the eighth-biggest in terms of sales, is the product of an October merger between Abitibi Consolidated and Bowater Inc.
The merger was based in part on the potential savings from combining the two companies’ operations.