Tissue snapshot: Resolute CEO thinks private-label tissue market in North America 'needs some consolidation'; Resolute reviewing strategic options for its tissue business, which is at 'a crossroads' after idling pulp, paper operations at Calhoun mill

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LOS ANGELES , February 8, 2022 () –

Resolute Forest Products Inc. is undertaking a strategic review of its tissue business after deciding to indefinitely idle pulp and paper operations at its Calhoun mill in Tennessee.

Resolute expects the retail tissue market to continue its recovery, while the away-from-home tissue market will remain sluggish for some time. Following the indefinite idling of pulp and paper operations at Calhoun, and as markets continue to stabilize in tissue, “we are reviewing strategic options for the business,” Resolute CEO Remi Lalonde said during the company’s Q4 2021 earnings call on Feb. 3, 2022.

He added that Resolute had received a number of inquiries after deciding to partially idle Calhoun, so executives thought it “would be important to share our perspective with investors a little bit.”

Lalonde said, in his view, the private-label tissue market in North America “needs some consolidation,” adding that the business rationale for Resolute to downstream integrate in tissue still makes some sense, “but we have struggled with execution.”

“We’re kind of at a crossroads with the business, having now idled pulp and paper operations at Calhoun,” he said. “The question is exactly what role we can play in the future with the tissue business. So I don't know what the answer is … but I know we have to ask ourselves the question.”

Resolute's Calhoun facility produced premium branded and private-label tissue products, while the company’s Hialeah and Sanford mills in Florida manufacture branded and private-label recycled and virgin paper grades, according to the company’s website.

Through November 2021, U.S. at-home tissue demand fell by 8% compared to 2020 as a result of consumer inventory rebalancing. Demand in the away-from-home tissue market improved by 5%, but is still well below pre-pandemic levels.

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