Packaging and tissue paper producer Cascades Inc. plans to close its Norampac containerboard mill in Trenton, Ont., after workers rejected its “final” contract offer.
MONTREAL: Packaging and tissue paper producer Cascades Inc. plans to close its Norampac containerboard mill in Trenton, Ont., after workers rejected its “final” contract offer.
The Quebec-based company said the mill will close by June 1, affecting nearly 130 workers.
Cascades said difficult negotiations ended last month after 10 months of talks with the Communications, Energy and Paperworkers Union.
Norampac division president Marc-Andre Depin said he was “deeply disappointed” that employees turned down “a positive and reasonable offer.”
“Despite substantial investments made by Cascades/Norampac to help increase its profitability, the Trenton mill has incurred significant losses over the years. These losses, combined with unacceptable labour relations, have left us with no other choice but to close the mill,” he said.
The Trenton facility produces corrugating medium and has an annual production capacity of 150,000 tonnes.
The union called the announced closure “job blackmail” and urged the company to work with the union to save jobs and protect the local economy.
CEP vice-president Dave Moffat said the company’s offer contained “unacceptable concessions.”
“Norampac employees, who have worked to build this mill up over the past decades, deserve better than this,” he stated, adding the closure would also jeopardize dozens of spin-off jobs in the community.
The mill closure will generate an estimated $9.5 million in losses for the local forest industry since the mill is an important customer of local wood suppliers, Cascades said.
Pierre Lacroix of Desjardins Capital Markets said the mill likely generated pre-tax operating losses.
“We view the negative impact of closure costs being offset by the positive impact of profitability improvement and supply discipline,” he wrote in a report.
The closure follows the recent announcement by RockTenn to close a comparable facility of similar size in Matane, Que., earlier in 2012.
He said containerboard supply constraints should help the North American containerboard industry to secure a price increase later in 2012.
Founded in 1964, Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibres. The company based in Kingsey Falls, Que., employs more than 12,000 people at more than 100 units in North America and Europe.
© 2012 The Canadian Press