Mill closure in Burnaby puts 100 people out of work.
September 21, 2011
by Canadian Packaging Staff
Cascades Inc., the Kingsey Falls, Que.-headquartered 100 per cent recycled fiber paper converter, has announced it will close its Burnaby, B.C. linerboard plant.
Citing the high cost of recycled fibers, the higher Canadian dollar and the plants higher labor rates than at other facilities, Cascades was left with no choice.
Set to take affect on December 1, 2011, the Burnaby plant closure—part of its Norampac division—will mean the loss of 100 jobs.
Thanks to China’s increased demand for reccylable fiber, it has made procuring source product a more expensive proposition for Cascades, with the costs going from a low of $25 a tonne in 2009 to just under $200 a tonne in 2011.
Along with it’s higher than average labor costs, the Burnaby mill is Norampac;s smallest operation with an annual capacity of 128,000 short tons, specializing in the production of 100 per cent recycled linerboard, medium and gypsum. The mill’s production will be redirected progressively towards other Norampac facilities in Ontario and the eastern U.S.
“This decision was made to mitigate the negative impact of several factors such as the strength of the Canadian dollar, as well as very high labour and recycled fibre costs. In addition, the mill’s profitability has been below our expectations for a few years and we could not pursue our operations under such conditions,” explains Marc-Andre Dépin, president and chief executive officer of Norampac.
Norampac also operates a plant in Richmond but since that plant converts a different product, production from Burnaby will not be moved there.
As well, Norampac’s management announced it has reached an agreement with regard to the sale of the Burnaby property.
Founded in 1964, Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibers. It employs close to 11,000 employees, who work in more than 100 units located in North America and Europe. For company information, visit www.cascades.com.