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Resolute to Permanently Close 465,000 Metric TPY of Newsprint Capacity

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Resolute Forest Products Inc., Montreal, Que., Canada, this week announced the permanent closure of 465,000 metric tons of newsprint production capacity in Canada. The capacity reduction will be achieved with the permanent closure of the Iroquois Falls (Ontario) newsprint mill, as well as paper machine No. 1 at Baie-Comeau (Quebec) and paper machine No. 4 at Clermont (Quebec).
 
Resolute's decision to reduce newsprint capacity is a result of the ongoing weakness in the global newsprint business, exacerbated by fiber-related issues, including both availability and costs, as well as transportation challenges. In Quebec, power costs played a role in these decisions, as well as the spruce budworm infestation.
 
"Market conditions have had a major impact on our newsprint operations in both Ontario and Quebec, and the cost position of these operations has made them vulnerable to the structural decline in newsprint," said Richard Garneau, president and CEO.
 
"There is another issue that cannot be ignored in these decisions: the ill-founded attacks of environmental activist groups. Their inaccurate and deceptive campaigning, which misrepresents the company's forest management practices, was also a factor. These campaigns are based on malicious falsehoods regarding Resolute's overall compliance with the Crown Forest Sustainability Act in Ontario and the Loi sur l'aménagement durable du territoire forestier in Quebec, and overall sustainability leadership. The provinces of Ontario and Quebec have forest management regimes that are among the very best in the world, and both governments are ensuring compliance. These systems deserve to be respected and defended, and we call upon those provinces to stand up for their standards and to refute these unjustified and unwarranted attacks," said Garneau.
 
The Iroquois Falls mill employs some 180 people and has an annual production capacity of 210,000 metric tons of newsprint. It will permanently close on December 22, with closure-related activities running into January 2015. The currently idled paper machine No. 1 at Baie-Comeau was permanently closed this past week, and paper machine No. 4 in Clermont will be permanently closed on or about Jan. 30, 2015. The closures at Baie-Comeau and Clermont will result in the loss of approximately 120 positions and the permanent removal of approximately 255,000 metric tons of newsprint capacity. All statutory notice provisions of the two provinces will be respected.
 
Resolute understands the impact these decisions will have on employees, their families and local communities. The company will work with union representatives and government officials to respond to the needs of those affected. Local management will also ensure that employees receive support, that the relevant conditions in the collective agreements are respected, and that as many employees as possible are transferred to other company facilities.
 
"The decision to rationalize our newsprint capacity was difficult, as we are mindful of the impact it will have on affected employees," Garneau added. "Resolute remains committed to customer service and to the delivery of high-quality products and will work closely with customers to continue to meet their needs."
 
Resolute Forest Products is a produces a diverse range of products, including newsprint, specialty papers, market pulp, and wood products. The company owns or operates nearly 40 pulp and paper mills and wood products facilities in the U.S., Canada, and South Korea, and power generation assets in Canada.
 

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