Pulp and Paper Canada

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Dark predictions for near future


August 9, 2005
By Pulp & Paper Canada

The immediate future of the pulp and paper industry looks somewhat dark, reported the Canadian Press in a recent re…

The immediate future of the pulp and paper industry looks somewhat dark, reported the Canadian Press in a recent release.<br>
“The industry is preparing to weather a coming storm,” John Duncanson, a forest industry analyst with Jennings Capital Inc. is quoted as saying. “There’s more dark out there than light, that’s for sure.” <br>
In the article, Mr. Duncanson warned that these closings won’t be the last because the Canadian dollar is expected to continue its upward climb and pulp prices are expected to fall.<br>
However, the greatest impact is seen as the continuously-increasing cost of energy.<br>
The crop of recent and future closings came from Abitibi-Consolidated (Stephenville, NF; Port Alfred, ON; Kenora, ON; portion of Grand-Falls-Windsor, NF), Parsons & Whittemore (Nackawic, NB), Domtar (Cornwall, ON), UPM-Kymmene (portion of Miramichi, NB), Smurfit-Stone Containerboard (New Richmond, QC; Bathurt, NB). In order to adjust to difficult economic times, companies planning extensive restructuring of some of their facilities include International Paper, Tembec and Bowater. Other companies which have also not performed up to expectation include Pope & Talbot, NorskeCanada and Domtar.<br>
However, despite these gloomy predictions, it was also noted that pressure from the unions might result in some negotiations with the provincial governments to cut deals with the pulp and paper companies because of the huge impact the loss of jobs would have on the work force in each community. <br>
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