Catalyst continues cost cutting
August 28, 2007 By Pulp & Paper Canada
Vancouver, BC Catalyst Paper is continuing its staffing reductions. On August 27, the company announced the down…
Vancouver, BC Catalyst Paper is continuing its staffing reductions. On August 27, the company announced the downsizing of 85 employees. The majority of these reductions will take place at the Crofton and Elk Falls mills, and most will be accomplished through early retirement. Catalyst expects an annualized savings of $13 million from this move, with one-time severance costs of $16 million.
Catalysts president and CEO Richard Garneau notes Competitive indication for staffing levels in the industry show this restructuring step will bring up within reach of best quartile benchmarks. Market pressures are not easing up, he added, and it is essential that we continue to take prudent and timely steps to restore profitability while strengthening our position in key product segments.
Another measure to improve profitability, as the company announced in May, was the indefinite curtailment of paper machine #4 in Port Alberni, which becomes effective September 1.
Catalysts corporate overhaul program includes the downsizing of 565 positions, centralization of functions, and the relocation of the Vancouver office to Richmond. It is on track to be completed by year-end, with expected saving from $58 to $63 million annually, and one-time costs of $61 million.
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