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Catalyst Paper Proposes Restart Plan for Elk Falls Mill

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Catalyst Paper, Richmond, B.C., Canada, this week announced that it resubmitted a proposal to the union that could allow for the restart of its Elk Falls paper mill (Vancouver Island, B.C.) at a labor cost, "all in," of approximately $40 per hour. The company notes that "this reflects current market realities and includes changes to wages and benefits similar to those already implemented with management and staff employees." The company also indicated that, to date, 63% of eligible hourly workers at the Elk Falls operation have elected the severance option arising from indefinite curtailment of the mill since early 2009.

The Elk Falls mill was indefinitely idled in February 2009 with resulting layoffs affecting approximately 400 hourly and staff employees. Elk Falls hourly employees are represented by Communications, Energy and Paperworkers Union of Canada (CEP) locals 630 and 1123. Approximately 225 hourly workers have taken the severance option with an average severance payout of $57,000 per employee.

"With a competitive cost structure, there could be a future for Elk Falls and to that end we presented employees with a proposal that could lead to the restart of two specialty paper machines at the mill," said Richard Garneau, president and C EO. "Nonetheless, we also recognize that electing to take severance is a personal choice. We hope the remaining employees want and will be given the chance to return to work and to continue to live in the community. We appreciate the Campbell River Mayor has shown strong commitment to preserving jobs through an agreement in principle that would address Class 4 property tax sustainability. And, while there are no guarantees that we will be able to overcome fiber supply shortages or acquire the customer orders necessary to restart, we know the outcome for this mill and community if nothing is done," he added.

With six mills located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 2.5 million metric tons.


EKA Chemicals Inc.