Resolute to Close Augusta Newsprint Machine Despite Level Demand

 

According to a report this past week by Life in Quebec, Sainte-Anne-de-la-Pérade, Qué, Canada, Resolute Forest Products (Montreal, Qué, Canada) is permanently shutting one of its U.S. newsprint machines, even though demand is showing signs of stabilizing after years of dramatic decreases.

The pulp, paper, and lumber producer said a machine at its mill in Augusta, Ga., USA, isn’t competitive because of the high U.S. dollar. About 100 jobs will be affected by the closure. The move, announced this past Thursday, will leave Resolute with three newsprint machines in the U.S., along with seven in Canada whose competitiveness is helped by the lower loonie.

Demand for newsprint has fallen by double digits annually in recent years as readers increasingly turn to digital media. While long-term market conditions remain challenging, the pace of the decline in North American and global markets decelerated to 5% in the first quarter, giving Resolute hope that demand will level out.

"We believe that we may be close to the floor that we were expecting three years ago (and) we’re certainly a lot more encouraged by the numbers that we are seeing," said CEO Richard Garneau during a conference call on Resolute’s first-quarter results.

Resolute recently announced price increases for newsprint in the U.S. amid reductions in industry capacity and improvements in demand.