Cascades has announced that it will cease its Kraft paper manufacturing activities in the East Angus (Québec) plant because of unfavourable market conditions and the failure of discussions concerning the plant's transfer and turnaround. Close to 175 employees will be affected by the closure, which will come into effect by October 3, 2014. By closing the plant, Cascades is withdrawing from the Kraft paper sector definitively.
"With the arrival of new competitors that convert newsprint paper machines to produce Kraft paper, and the ongoing weakening of market conditions for our products, the East Angus plant has not managed to maintain a competitive edge in the market despite significant investments and serious recovery efforts," explained Luc Langevin, President and Chief Operating Officer of Cascades Specialty Products Group. "Last November, we announced to employees our decision to withdraw from the industry. At the time, we offered them the plant debt free. After several months of ongoing efforts on the part of buyer Gino Lévesque, the Québec government and Cascades to come up with a financial package, the project was abandoned because of a lack of new investors. With the failure of the turnaround project and the loss of numerous key employees, today we are forced to announce the end of these activities."
"Naturally, we are very disappointed that the project failed," said Mario Plourde, President and Chief Executive Officer of Cascades. "However, we would like to thank the employees' provisional committee, the buyer and the Government of Québec for the work they put into the project over several months in the attempt to save jobs. Since our strategic orientations are focused on growth in the packaging, tissue paper and recovery sectors, it became impossible to keep the plant open with its inability to regain profitability. Following today's announcement, Cascades will assume all of the plant's responsibilities, notably the employee pension plan."
