On May 13, the Zhydachiv Pulp and Paper plant in the Ukraine announced it was stopping all newsprint production, even though it is a monopoly producer in the region. It simply couldn’t compete with prices for imported newsprint from Russia and Poland. In southeast Asia, other producers — many with new plants and lower labour costs, are cranking up new production.
On May 16, a spokesman for the Stern Group went to explain his company’s planned purchase of the Point Tupper, N.S., paper mill — the purchaser says the mill is the cream of the crop of North American mills and plans to produce up to 400,000 tonnes of high-grade paper on the mill’s machines. It will need a special deal for cheap power to make the mill pay — but at the same time, the new arrangement will see the mill shut its newsprint machine down completely.
On April 25, there was this in the Halifax Herald: “Bowater Mersey Paper Co., owned by Resolute Forest Products Inc. of Montreal, will shut down May 6 to 21 and June 17 to July 2, Resolute spokesman Seth Kursman said Wednesday. ‘This reflects challenging market conditions,’ said Kursman, who speaks for the company. ‘This temporary downtime impacts approximately 18,700 metric tonnes of paper production.’ He wouldn’t comment on what the prognosis is for the mill for the rest of the year. ‘This is market-related downtime,’ Kursman said. ‘This is what we know now. It would be inappropriate for me to speculate on the future.’” The mill received a $50-million bailout from the Nova
Scotia government in December 2011.
Meanwhile, in B.C., former workers for Catalyst Paper are watching a vote by creditors tonight to see if the company — which was $800 million in debt when it went into creditor protection in January — will survive.
Part of what’s at issue?
The B.C. superintendent of pensions has allowed Catalyst to defer pension payments, meaning there’s currently a $118-million shortfall in the fund — a situation that could mean pensioners at a series of B.C. mills could face cuts of 35 per cent or more in their pensions.
What’s the message in this gloom and doom?
A simple one. Two of this province’s paper mills have closed permanently, and the third and last one is considering its options.
Right now, Kruger is re-evaluating the operations of the Corner Brook mill, after workers turned down a request from the company to have five extra years to make up a shortfall in the operation’s pension fund. The workers did not like some of the language in the proposal; they now say they want to go back to the company and talk about it again.
It’s not hard to understand why workers are frustrated — paper companies, caught in their own particular binds when it comes to increasing costs and shrinking sales, seem to see workers as juicy targets.
At the same time, this is an industry with few options — and companies are still shutting operations, practically on a monthly basis.
It’s not a question of whether or not this is the last concession that a paper company will ask from its workers: it isn’t.
Until paper-making becomes profitable again — which it may not — companies will fight all the way to the bottom.
What workers have to decide is whether a bird in the hand is worth what used to be two birds in the past.
Look at the industry: the good times are not coming back.