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Bowater to close kraft mill

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U.S. forestry company Bowater Inc. is shutting down a pulp mill in Thunder Bay—a move that will put about 280 people out of work.

The South Carolina-based company announced yesterday it is closing the kraft mill at the end of April as part of a streamlining in the wake of a loss of $101.9 million (U.S.) for the fourth quarter.

The mill produces about 210,000 tonnes of market pulp a year, but has faced high costs for wood fibre and energy.

“I regret the impact that our decision at Thunder Bay will have on our employees, their families, and the community,” Arnold Nemirow, chairman, president, and CEO, said in the company’s earnings report released early yesterday.

“However, this restructuring is essential for the viability of this site,” he added. “Also critical is an improved operating environment in Ontario.

“Although better than 2004, our 2005 financial results were very disappointing as we continued to face a stronger Canadian dollar, and higher energy and wood costs.”

In Thunder Bay, company spokesman Don Campbell said the decision to close the mill, which has been operating for 40 years, was necessary because of high energy and wood fibre costs.

“The issue is costs,” Campbell told CKDR, a radio station in Dryden. “Costs to operate this kraft mill have deteriorated and are at unacceptable levels right now, mainly due to high energy costs, including electricity, but also natural gas, and then the high and unacceptable fibre costs.

“The company just can’t tolerate these levels of costs any more.”

The latest closure follows a spate of mill shutdowns that have battered Canada’s forestry sector in the last year or so.

Major companies such as Domtar, Abitibi-Consolidated, Tembec, and others have shut down operations that are losing money because of higher energy costs, a rising Canadian dollar, and other factors.

The Communications, Energy and Paperworkers Union of Canada estimates about 7,500 jobs have been cut at mills from Newfoundland to British Columbia in the latest industry downsizing.

In a statement, the union called on Prime Minister-designate Stephen Harper to urgently address what it called a crisis in Canada’s forestry sector.

“Just before the election, the then federal government announced a $1.5 billion aid package for forest-based companies and we are asking Mr. Harper to renew that commitment with a firm resolution to tie government aid to maintenance and creation of jobs,” said union president Brian Payne.

Meanwhile, the union’s Ontario region vice-president, Cec Makowski, demanded Bowater reverse the shutdown and join the union in appealing to the federal and provincial governments to find ways to save the Thunder Bay mill and others across northern and eastern Ontario, where more than 3,500 workers have lost their jobs in recent months.

“The solution to this crisis lies with a change in policies at both levels of government,” Makowski said. “High energy and fibre costs are crippling the industry in Ontario while trade and monetary policies at the federal level are also hurting.”

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