White Birch Paper's Stadacona newsprint mill in Quebec City, Quebec, idles production Dec. 9, citing high wage, fiber costs; Quebec says White Birch, union must hammer out new mill contract before it will step in

MONTREAL , December 12, 2011 () – The landmark Stadacona newsprint mill in Quebec City has joined two Nova Scotia paper mills on the endangered species list.

White Birch Paper Co., North America's second-biggest surviving newsprint producer, Friday carried out its Nov. 16 threat and shut down operations at Stadacona, saying its wage and fibre costs are way too high.

The Stadacona mill, acquired by the U.S. family-controlled White Birch from a Japanese multinational in 2004, has annual capacity of 410,000 tonnes of newsprint and 140,000 tonnes of directory paper and paperboard and a payroll of 600.

Workers found the gates closed early Friday.

The insolvent White Birch, based in Greenwich, Conn., also owns the former F.F. Soucy newsprint mill at Rivière du Loup and the Masson newsprint mill near Ottawa. Together with its Bear Island newsprint and specialty mill in Virginia, it has total annual capacity of 1.3 million tonnes of newsprint, directory paper and paperboard.

It has been operating under Canadian and U.S. creditor protection since February 2010, while trying to refinance its debt and make a new start. Its strategy has followed the Nova Scotia mill shutdowns: ask for government money, demand heavy workforce, pay and pension concessions from union negotiators, and hope fibre prices are near the top.

The companies do not see any letup in the five-year decline in the North American newsprint market as the Internet age advances and squeezes newspaper advertising.

In its Nov. 16 warning, CEO Chris Brant regretted the impact of the Stadacona shutdown on the employees just before the holidays, but also said "Stadacona has become unsustainable and we also need to turn the situation around at Rivière du Loup and Masson ."

The NewPage mill in Cape Breton and the Bowater Mersey mill in Brooklyn are idle, though Mersey may have a few more years left after heavy union concessions, lower power prices and a municipal tax cut.

The Quebec government says White Birch and the union must hammer out a new Stadacona contract before it will step in.

Copyright The Gazette (Montreal). All rights reserved.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.