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Possible cuts ahead, AbitibiBowater cautions


August 10, 2008
By Pulp & Paper Canada

AbitibiBowater is bracing for possible deep capacity cuts, Bloomberg recently reported. If North American demand co…

AbitibiBowater is bracing for possible deep capacity cuts, Bloomberg recently reported. If North American demand continues its pattern of contraction, the company may scale back its operations even further. AbitibiBowater idled roughly 600,000 metric tons of annual newsprint capacity this year in Canada and the U.S., representing approximately 9% of its total output.

Bloomberg further reported the second round of cuts may be more extensive than the first, contingent upon outlooks for newsprint demand, the value of the U.S. dollar relative to the Euro, and the possibility of expanding exports.

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“The objective here is not to shut things down, the objective here is to make money,” Bloomberg reported AbitibiBowater CEO David J. Paterson said.

“If I have to choose between making a profit and running unprofitable mills, I will choose to make a profit. The North American newsprint market is much worse than we thought it would be. We went into the year thinking there would be a 10% decline, and on the big daily newspaper side it’s more like 14 to 15%. And certainly our input costs are might higher than we thought, primarily energy but also waste paper.”


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