22 October 2007

Kruger shuts machine at Corner Brook

Faced with declining demand and a high Canadian dollar, Kruger Inc is shutting Paper Machine No. 1 at its Corner Brook operation. The shut-down is for an indefinite period beginning November 5 and will reduce the mill's output by 80,000 tonnes annually.

No sign when the provincial government first learned of the decision, although it was far enough in advance to see the natural resources minister shipped to Corner Brook for a media availability. Kathy Dunderdale told CBC's Radio Noon that the provincial government had "invested' heavily in Kruger's Corner Brook operation in recent years. Dunderdale put the figure at $20 million. That would include a harvesting subsidy announced by Dunderdale's predecessor Ed Byrne to Kruger in March 2006, although the government didn't announce the price paid at the time. That amount would also include a power cost subsidy of $10 million Dunderdale announced last October.

Dunderdale said 83 people will be laid off as a result of the machine closure but that the figure might be reduced to 13 due to layoffs.

Kruger closed one machine temporarily in July, 2007 citing the same reasons as the ones given on Monday.