Resolute Forest Products cites challenging market conditions and the loss of a major customer as the reasons for the indefinite idling of the kraft mill and paper machine No. 5 (PM5) at its pulp and paper operation in Fort Frances, Ont.
The closures will put approximately 239 people out of work.
The kraft mill has an annual production capacity of approximately 200,000 tonnes of market pulp, while PM5 has an annual capacity of 105,000 tonnes of groundwood specialty printing papers.
“The markets for these products are challenging and are expected to remain so. The kraft mill situation is particularly difficult given Fort Frances' operating configuration and the recent decision by a key customer to stop consuming the pulp supplied by Resolute to its mill," said Resolute's president and CEO, Richard Garneau.
“Our kraft mill's drying capacity is limited to about 40 percent of its production capacity, making it impossible to continue operating the mill in a profitable manner."
The company is exploring alternative product possibilities for its Fort Frances pulp mill. The idling of PM5 is driven by the decrease in consumption as well as the high value of the Canadian dollar. Garneau noted that the company will monitor market conditions and work with stakeholders to improve the mill’s cost position.
The running down of fibre inventories and shutdown of the Fort Frances kraft mill is expected to be complete by late November. PM5 will continue to operate until late November.
Fort Frances mayor Roy Avis told CBC News that Resolute is the town’s major employer, and he hopes the company can find alternate product opportunities and re-open operations.