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Red Rock closes PM1


September 22, 2005
By Pulp & Paper Canada

Red Rock closes paper machine

Red Rock closes paper machine

SAINT BRUNO, QC — Norampac Inc. announced the permanent closure of one of its two paper machines at its mill located in Red Rock, ON. PM1 had been used to manufacture Kraft linerboard and was producing approximately 150,000 short tons yearly. The company explained that the stronger Canadian dollar as well as an increase in energy and wood fibre costs in Northern Ontario left them no choice but to take a very difficult decision.
“Norampac can no longer afford to operate this machine under the present market conditions,” said Marc-Andr Dpin, president and CEO of Norampac.
No decision has yet been taken regarding PM2, which produces approximately 300,000 short tons a year.
Norampac is currently considering all possible alternatives in order to optimize its profitability.
“This mill is operational since 1945, and we will do all that we can, to prevent its closure,” concluded Dpin.
As a result of this permanent closure, Norampac expects to take a pre-tax charge of approximately $12 million during the second half of 2005, nearly $9million of which is non-cash. These charges are estimates and will be finalized by year-end.
The shutdown of PM1 will result in the loss of approximately 125 to 175 jobs. There are currently 435 employees at the Red Rock mill.

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Information supplied by Norampac


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