U.S. forestry giant shuts Ontario and Prairie mills
Dec. 16, 2005. 01:00 AM
U.S. forestry giant Weyerhaeuser Co. is closing two paper operations in Canada, affecting more than 800 jobs in northern Ontario and Saskatchewan.
The moves, announced late yesterday, reflect a continued slump in the North American paper industry, which has been hit hard by rising energy costs and weak demand.
Weyerhaeuser said one of the paper machines at its Dryden pulp and paper mill in northern Ontario will close April 1, affecting 80 of the mill's 795 employees. Another 40 jobs were cut earlier.
Meanwhile, the Prince Albert pulp and paper mill in Saskatchewan, which the company said in October it would shut down, will end paper production at the end of this month.
The pulp mill, which is being put up for sale, will continue operating until spring to minimize risk of cold-weather damage.
The Prince Albert mill employs 690 employees.
The Federal Way, Wash., company said the latest cuts will result in a pre-tax charge of $380 million (U.S.) to $385 million in the fourth quarter.
Weyerhaeuser is one of the world's largest integrated forest products companies, with 2004 sales of $22.7 billion.
Weyerhaeuser's announcement comes a day after Abitibi-Consolidated Inc. said it had permanently closed two newsprint mills — one in Stephenville, Nfld., that employed 300 people, and another in Kenora, Ont., where 320 people had worked.
The Tory government in Newfoundland and Labrador said yesterday it will consider expropriating Abitibi's Stephenville mill if a buyer appears. Both Premier Danny Williams and Natural Resources Minister Ed Byrne said the tough measure is being kept as an option.
Abitibi has made it clear it hasn't obtained a buyer for the plant or equipment, nor does it plan on selling at this point.
Abitibi-Consolidated said the closings were brought on by high costs and an inability to renegotiate a union contract.
The decision has embarrassed the government in Newfoundland, which just a month ago offered the company $150 million in assistance over 10 years to keep the plant going.
Canadian Press
