Kruger planning to reduce workforce at its newsprint mill in Corner Brook, Newfoundland, due to declining demand, says Finance Minister Tom Marshall; one source indicated up to 90 positions would be cut

LOS ANGELES , January 23, 2012 () –

Kruger Inc. is planning to reduce the workforce at its Corner Brook Pulp and Paper Ltd. mill in Corner Brook, Newfoundland, due to a drop in demand for newsprint, according to sources, reported The Telegram on Jan. 23.

As many as 90 jobs would be lost and the cuts would be made across the board, affecting management and unionized positions, as well as jobs at the mill and in woodlands operations, according to unconfirmed information reported by The Western Star on Jan. 21.

Corner Brook’s unions are expected to be officially notified about the job cuts on Tuesday, said one source. Another source said the provincial government was notified of the Montreal-based company’s plans, The Telegram reported.

Finance Minister Tom Marshall said Kruger assured him prior to coming to Corner Brook for a pre-budget session that most of the job losses would be through attrition, but he could not confirm the exact number of jobs involved in the cutbacks.

The mill’s long-term survival will depend on cooperation among workers, the government and the company to “take steps together to make this a low-cost mill and one that can survive and make a profit in the future,” said Marshall, reported The Telegram.

The government is prepared to partner with the workers and the company to achieve the mill’s long-term viability, he said, adding that he and the company both believe they can achieve that goal.

The mill now employs about 500 people and operates two paper machines, down from four machines making newsprint less than five years ago, reported The Western Star.

Kruger still owes unionized workers for the 10% wage deferral they agreed to in 2010. The amount is to come due when the paper mill returns to profitability, essentially giving the company a loan to help it survive.

Marshall said he believes the mill’s advantages in energy and wood costs and its highly-trained workforce will help it overcome challenging markets, The Telegram reported.

The Corner Brook mill has a production capacity of 250,000 tonnes per year of newsprint, which is made from thermomechanical produced onsite. In addition to a 15-megawatt (MW) biomass boiler, the mill has two hydro power plants with a combined installed capacity of more than 120 MW, which provides 70% of the mill’s energy, according to Kruger’s website.

The primary source of this article is The Telegram, St. John’s, Newfoundland and Labrador, on Jan. 23, 2012.

 

* 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.