13 July 2007

Kruger closes CB paper machine, other companies may follow suit

Kruger Inc. announced late on Friday that it was shutting down a newsprint making machine at the company's Corner Brook mill effective July 22.

The company blamed the rising Canadian dollar for the unexpected shut-down.

Other factors also likely played a role, namely surplus capacity in the North American market coupled with surplus production capacity.

Editor & Publisher reported on July 5 that North American newsprint demand fell year over year by slightly over 8% in May and was down 11% in the first five months of 2007. The online edition of the newspaper industry journal also reported:
Further closures by Abitibi-Consolidated Inc. or Bowater Inc. are not likely to come until after the two companies merge, which is slated for late July. Mid-sized companies also are expected to indicate plans to close high-cost machines this year, noted Dillon.

Recently, some producers announced closures. Catalyst Paper Corp. indicated last month that it would indefinitely idle its 134,000 tonnes/year No. 4 newsprint machine at Port Alberni, B.C., by Sept. 1. More recently, a June fire at Abitibi-Consolidated Inc.’s Grand Falls, Nfld., newsprint mill resulted in a decision to shut the mill down for three weeks for repairs. Meanwhile, Kruger Inc. reportedly announced downtime at several mills.