August 1, 2012
Catalyst Paper announced the permanent closure of its Snowflake recycle mill located in northeastern Arizona (USA) and its subsidiary the Apache Railway Company. The operations currently employ 308 salaried and hourly workers. The operation is scheduled to shut production on September 30, 2012.
Catalyst implemented a number of measures since acquiring the Snowflake operation in 2008, to address market challenges and input cost pressures. These included production of higher-value specialty paper grades at what was formerly a newsprint-only mill, capital investment, productivity, quality and service improvements, full leverage of the mill’s environmental attributes, and competitive labour agreements. Catalyst has also explored a range of alternatives, including attempting to sell the mill on a going concern basis.
However with newsprint demand down more than 10 per cent annually since the end of 2008, old newsprint (ONP) price volatility and higher freight costs as procurement and sales have been forced to go further afield to source recycled paper supply and secure product orders, the mill’s profitability could not be restored. ONP prices have increased approximately 163% since 2009.
The site will subsequently be prepared for sale and repurposing, the company added. The closure is not anticipated to have any impact on operations at Catalyst’s other mills.
The Snowflake Mill, located in the foothills of the White Mountains in northeastern Arizona, produces 100% recycled newsprint (289,000 tpy) and specialties paper (48,000 tpy) on two paper machines. Its products are sold primarily to newspaper publishers and commercial printers for a variety of uses. The facility is chain-of-custody certified to the Forest Stewardship Council standard.
With four mills, located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 1.8 million tonnes.