Wednesday, October 28, 2009

Another blow to the Northwest economy, as Kitimat's Eurocan announces it is closing

"We deeply regret the impact the mill closure will have on our 535 employees, their families and the community and we will ensure those who are affected are treated with fairness and respect," -- A statement from West Fraser Chairman, President and CRO Hank Ketcham, announcing the closure of the Eurocan mill in Kitimat.

There is shock and concern for the families of those affected by a major announcement in Kitimat today, as the city's second largest employer, Eurocan, announced that as of January 31, 2010 the Eurocan pulp mill will close.

In a press release distributed by the company on Wednesday, West Fraser outlined the many challenges that faced the mill over the last few years, many of which apparently in the company's eyes are insurmountable.

Among the contributing factors were, historically high costs and negative returns. As well as recent sawmill curtailments in the region, which have reduced the supply of lower-cost residual wood chips to Eurocan and increased the mill's reliance on more expensive whole log chip.

Those concerns combined with the struggling world economy highlighted since December of 2008 with Eurocan experiencing a drop of approximately 40 per cent in the net selling price of its products.

With all of those factors considered, West Fraser began what they call a "deep and thorough review", seeking ways to offset the declines, in the end they determined that the only alternative would be permanent closure.

When the gates close for good on January 31st, 2010, 535 employees will be out of work at the mill and the service industry in Kitimat and Terrace will suffer a large hit as well, with any number of local businesses no doubt now preparing to feel the impact of the decision today.

The closure will have a major impact on the budget plans for the City of Kitimat, and comes at a time when that community is concerned about the fate of Alcan's operations in the city and what the future may hold for that company.

Northern Sentinel-- Eurocan paper mill in Kitimat to close permanently

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