Citing slumping demand, Resolute Forest Products, Montreal, Que., Canada, has announced a restructuring plan for its Calhoun, Tenn., USA, mill that will result in 222 layoffs out of its workforce of 713 people - or 31%. The company said on Tuesday (Aug. 5, 2017) of this week that PM 3 and PM 5 at the Calhoun mill will permanently close. 

Spokeswoman Debbie Johnston said that "this decision is motivated by challenging long-term market conditions – including unprecedented demand decline – for newsprint and uncoated groundwood paper produced on the machines." She noted that sales for those grades are down 8% for the first six months of 2017, and down 52% over the past decade. 

 

 

Johnston added that newsprint demand has decreased 12% during the first six months of 2017, and has gone down by almost two-thirds during the past decade. 

Just two years ago, the company announced an expansion and the hiring of 50 new jobs:

According to Johnson, other changes coming as a result of this move include:

• Additional changes associated with the closure of the two paper machines include the closure of the thermomechanical pulp mill, a woodyard, and a paper wrap line, as well as reductions in the shipping department.
• PM 3 and PM 5 will be closed no later than September 30, resulting in the reduction of 356,500 metric tpy of paper production capacity. The thermomechanical pulp mill will be shut down at the same time.
• However, market pulp production capacity at the mill will increase by more than 10%.

Johnston says affected employees will be notified as soon as possible of their employment status at the mill. Some employees will be asked to continue to work to assist with the orderly shutdown of equipment, while others may be offered different positions within the mill or at other company facilities.

"We regret the impact this decision will have on our employees, their families, and the community, and will work with affected employees, government officials, and other local authorities on programs to mitigate the impact of the closures," Johnston said. 

Resolute Forest Products produces a diverse range of products, including market pulp, tissue, wood products, newsprint, and specialty papers, which are marketed in 70-plus countries. The company owns or operates some 40 manufacturing facilities, as well as power generation assets, in the U.S. and Canada. Resolute has third-party certified 100% of its managed woodlands to internationally recognized sustainable forest management standards.