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40 per cent of Resolute's newsprint capacities are down

15 Jun 2020 − 

Several newsprint manufacturers in North America are currently taking downtime as demand weakens. Resolute Forest Products has taken 40 per cent of its capacities from the market by halting two mills.

The global publication paper market is struggling with significant excess capacity right now, as a spate of recent shutdown measures show - and North America is no exception.

One company scaling back output is Canadian forestry group Resolute Forest Products, which has halted a considerable share of its newsprint production during the coronavirus crisis. The company has temporarily idled its Baie-Comeau and Amos mills in Québec, which can produce up to 322,000 and 194,000 t of newsprint, respectively. This equates to 40 per cent of Resolute's total newsprint capacities of 1.3 million t, spread across six factories.

On 23 February, Resolute also temporarily idled its Comtois site in Québec, which produces lumber and has a capacity of around 340,000 m³ (145 million board feet).

According to a Resolute spokesperson, there is no timeline for restarting the affected plants. The Baie-Comeau mill has been down since 28 March and the Amos mill since 20 April. It is unclear when production will resume. This would depend on how demand developed after the coronavirus crisis, the spokesperson said. The company adds that it does not want to permanently close the facility but cannot make any predictions at this time.

Demand down by 50 per cent

Resolute explained that the outbreak of the coronavirus and the associated lockdown measures led to a collapse in demand for newsprint as well as for the company's specialty papers. Delivery volumes reportedly fell by 50 per cent compared to normal levels. Demand from India, for example, even plunged by 70 per cent, according to the spokesman.

Resolute Forest Products has had to contend declining demand in the publication paper segment for some time. In recent months and years, the company has repeatedly taken downtime or closed capacities in an effort to adjust supply to demand. In November 2019, it indefinitely idled its Augusta newsprint mill, which has a capacity of 215,000 tpy. The Thorold newsprint site has already been offline for three years and in 2018, the company sold its Catawba LWC mill. It also mothballed two publication paper machines at the Calhoun mill.

Resolute's goal is to gradually reduce its activities in the publication paper sector and instead expand its footprint in the tissue segment, where the group sees growth potential. Resolute entered this market in 2015 and has been investing in expanding its tissue paper capacities ever since, with capacites now now amounting to 116,000 tpy.

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